- EUR/USD remains firm near the 1.1100 area.
- DXY remains on the defensive below 98.00.
- EMU Producer Prices next on the docket.
The upbeat momentum in the shared currency remains firm for yet another session and is now lifting EUR/USD to fresh daily highs beyond 1.1080.
EUR/USD closer to 1.1100
The pair is up for the fourth consecutive session on Tuesday, extending the upside on the back of persistent weakness around the buck amidst rising trade concerns and poor US data releases.
Indeed, spot has extended the recent rebound at the beginning of the week following fresh concerns on the trade front after President Trump said the US will raise tariffs on imports of metals from Argentina and Brazil, while talking down at the same time the likeliness that US and China could sign the ‘Phase One’ deal any time soon.
Extra legs for the pair’s rally - and another source of USD- selling - came after the US manufacturing gauge from the Institute for Supply Management (ISM) remained in the contraction territory for yet another month in November, showing that the sector continues to struggle to regain poise.
Moving forward, nothing relevant data wise in the US calendar, while November’s Producer Prices are only due in Euroland later in the day.
What to look for around EUR
The pair keeps correcting higher after finding quite solid support in the 1.0990 region last week and is now targeting the key resistance area near 1.1100 the figure. The euro, in the meantime, is expected to keep tracking developments from the US-China trade dispute as well as USD-dynamics. On the more macro view, the slowdown in the region appears far from abated despite some positive results from key fundamentals in Germany as of late. This does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the cautious/bearish view on the European currency in the medium term.
EUR/USD levels to watch
At the moment, the pair is gaining 0.01% at 1.1078 and faces the next hurdle at 1.1097 (monthly high Nov.21) seconded by 1.1161 (200-day SMA) and finally 1.1179 (monthly high Oct.21). On the other hand, a breakdown of 1.1040 (55-day SMA) would target 1.0989 (monthly low Nov.14) en route to 1.0925 (low Sep.3).
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