EUR/USD probes daily highs near 1.1170, USD deflates

The single currency has managed to regain some poise in the European afternoon and is now lifting EUR/USD to the area of daily highs beyond 1.1160.

EUR/USD higher on USD-selling

After five consecutive session with losses, the pair seems to have found some respite at the beginning of the week and is now bouncing to the vicinity of 1.1170 on the back of the renewed offered bias in t he buck.

The greenback, in the meantime, has lost the grip beyond the critical barrier at 98.00 the figure and has now slipped back to the 97.00 in tandem with declining US yields and a somewhat better mood surrounding the riskier assets.

In the data space, earlier in the day German Producer Prices surprised to the upside in April and the Currency Account surplus in the euro area eased to €24.7 billion in March.

Across the pond, the Chicago Fed National Activity index came in at -0.45 for the month of April, missing consensus. Later in the NA session, speeches by FOMC’s Harker, Williams and Powell should keep the focus on the buck.

What to look for around EUR

Recent data releases in Euroland and Germany have poured cold water over the idea that some healing process could be under way in the region, re-shifting the focus to the ongoing slowdown and its probable duration and extension. In the meantime, the current ‘neutral/dovish’ stance from the ECB is expected to persist for the remainder of the year and probable through H1 2020. The broad-based risk-appetite trends and USD-dynamics should dictate the sentiment surrounding the European currency for the time being, all in combination with the now stalled US-China negotiations and potential US tariffs on EU products. On the political front, Italy has re-emerged as a source of uncertainty and volatility, while investors’ focus has now shifted to the EU parliamentary elections next week.

EUR/USD levels to watch

At the moment, the pair is gaining 0.06% at 1.1163 and a break above 1.1242 (55-day SMA) would target 1.1264 (high May 1) en route to 1.1305 (100-day SMA). On the other hand, the next down barrier emerges at 1.1135 (low May 3) seconded by 1.1109 (2019 low Apr.26) and finally 1.0839 (monthly low May 2017).