- EUR/USD challenges weekly lows near 1.0960.
- The dollar remains bid on geopolitics, inflation.
- EMU Flash Consumer Confidence next on tap in the docket.
The selling pressure keeps hurting the single currency and drags EUR/USD to the area of weekly lows around 1.0960.
EUR/USD weaker on USD-buying
EUR/USD came under renewed and strong downside pressure following the intense improvement in the sentiment around the dollar, which was exacerbated in response to persevering geopolitical unease along with the resurgence of inflation jitters.
In addition, investors' hunt for safety collaborated with the demand for bonds and forced yields on both sides of the Atlantic to shed part of the recent gains.
In the domestic calendar, the European Commission will publish the flash gauge of the Consumer Confidence in the region for the current month. Across the pond, New Home Sales contracted 2.0% MoM in February, or 0.772M units.
What to look for around EUR
EUR/USD comes under pressure and breaches the key support at the 1.1000 yardstick midweek. So far, pockets of strength in the single currency should appear reinforced by the speculation of the start of the hiking cycle by the ECB at some point by year end, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a firmer euro for the time being.
Key events in the euro area this week: EC Flash Consumer Confidence (Wednesday) – Germany, EMU Flash PMIs (Thursday) – Germany IFO Business Climate (Friday).
Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the euro area. Speculation of ECB tightening/tapering later in the year. Presidential elections in France in April. Impact of the geopolitical conflict in Ukraine.
EUR/USD levels to watch
So far, spot is retreating 0.47% at 1.0975 and faces the next up barrier at 1.1137 (weekly high March 17) followed by 1.1229 (55-day SMA) and finally 1.1277 (100-day SMA). On the other hand, a drop below 1.0960 (low March 22) would target 1.0900 (weekly low March 14) en route to 1.0805 (2022 low March 7).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.