EUR/USD stays depressed near 3-week lows around 1.1020

The selling bias around the European currency stays well in place at the end of the week, with EUR/USD navigating the area of 3-week lows in the 1.1030/20 band.

EUR/USD looks to trade, US data

Spot has been on the defensive since Monday, coming under renewed and strong downside pressure after another failed attempt to advance further north of the 1.1180 region.

Once again higher US yields on the back of persistent optimism on the US-China trade scenario are helping the buck via a stronger USD/JPY and the wider yield spread differential vs. their European peers, all in detriment of any attempt of recovery in the pair.

In the docket, auspicious results from the German trade balance for the month of September did nothing to help the euro earlier in the day, while advanced figures of US Consumer Sentiment for the current month are next on the US data space.

What to look for around EUR

The selling mood in spot has been gathering traction since the beginning of the week on the back of the renewed buying interest in the greenback and the broad-based improvement in the risk-complex, all stemming from the US-China trade scenario. On the macro view, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh further on EUR in the short/medium term horizon.

EUR/USD levels to watch

At the moment, the pair is losing 0.17% at 1.1030 and a breakdown of 1.1026 (monthly low Nov.8) would target 1.1000 (psychological handle) en route to 1.0925 (low Sep.3). On the upside, the next up barrier emerges at 1.1114 (100-day SMA) followed by 1.1179 (monthly high Oct.21) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally).