- The rebound from daily lows stalled near 1.1360.
- The greenback stays depressed on poor data, trade news.
- Further progress in US-China talks sustains upbeat mood.
EUR/USD has once again failed to break above 2-week highs in the 1.1360 region today, sparking another correction lower.
EUR/USD focused on trade
Spot rebounded sharply from daily lows in the 1.1320 area following rising optimism on the US-Sino trade talks, particularly following comments from US M.Pompeo regarding that negotiations have yielded real progress as of late.
In parallel, the US docket showed the key regional manufacturing gauge measured by the Philly Fed tumbling to -4.1 for the current month, largely missing estimates.
Earlier in the day, the ECB minutes noted the Council now expects the current deceleration in the region to last longer than initially forecasted, while concerns have emerged on the probable effects on inflation expectations.
What to look for around EUR
The shared currency continues to look to developments from the US-China trade talks for near term direction as well as any headlines from the effervescence on the US-EU trade front. Disappointing advanced prints from manufacturing PMIs in Germany and the euro bloc plus a ‘reality check’ from the ECB minutes appear to have exacerbated concerns over the deterioration in the bloc’s fundamentals and casted further shadows over the probability of any action on rates from the ECB this year.
EUR/USD levels to watch
At the moment, the pair is gaining 0.11% at 1.1348 facing the next up barrier at 1.1371 (high Feb.20) seconded by 1.1382 (55-day SMA) and then 1.1394 (100-day SMA). On the other hand, a break below 1.1308 (10-day SMA) would aim for 1.1234 (2019 low Feb.15) and finally 1.1215 (2018 low Nov.12).
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