- EUR/USD gave away Tuesday’s gains and returns to 1.10.
- The better tone in the Dollar weighs on the pair.
- Attention gyrated to Trump’s impeachment.
The single currency has come under renewed and moderate selling pressure in the middle of the week and is dragging EUR/USD back to the 1.10 neighbourhood.
EUR/USD focused on US politics, data
The pair has faded Tuesday’s spike to weekly highs near 1.1030 as the Greenback resumed its downside, shrugging off news of the Democrat’s inquiry impeachment against President Trump and the tick lower in the Consumer Confidence for the current month.
The offered bias around spot remains well and sound so far today, quickly leaving behind the lackluster improvement from the IFO’s Business Climate in Germany for the current month (published yesterday). Investors appear to have shifted their attention to the US-China trade developments and fundamental data in Euroland.
There are no significant releases in the euro docket today, while ECB’s B.Coeure will participate in a hearing in Berlin later in the afternoon.
What to look for around EUR
EUR is facing extra downside pressure at the beginning of the week and threatens to extend the move to 2019 lows in the 1.0920 region, as any recovery in the German economy appears to take longer than expected in light of the recent flash PMIs. The unremitting slowdown in the region justifies the looser for longer monetary conditions by the ECB and adds to the probability that the German economy could slip into technical recession in Q3. Adding to this gloomy scenario, potential US tariffs on imports of EU cars remain well on the table, while persistent uncertainty around Brexit adds to the downbeat outlook.
EUR/USD levels to watch
At the moment, the pair is losing 0.20% at 1.0997 and a break below 1.0966 (low Sep.23) would target 1.0925 (2019 low Sep.3) en route to 1.0839 (monthly low May 11 2017). On the flip side, the initial hurdle emerges at 1.1026 (21-day SMA) followed by 1.1109 (monthly high Sep.13) and finally 1.1163 (high Aug.26).
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