EUR/USD remains under pressure around 1.1180

The sentiment around the shared currency remains fragile in the first half of the week and is now motivating EUR/USD to test the lower end of the range near 1.1180.

EUR/USD focused on data, risk trends

The greenback’s recovery stays well and sound so far this week, forcing the riskier assets to shed part of last week’s gains amidst some pick up in trade concerns, particularly after President Trump said that further tariffs on Chinese products remain a tangible possibility.

In the meantime, the pair remains unable to gather serious traction and sustain a convincing break above 1.1200 the figure, where awaits the key 55-day SMA in the 1.1230 region ahead of more relevant levels in the 1.1260/70 band.

Later in the session, ECB’s Private Sector Loans and M3 Money Supply figures are next in the docket seconded by sentiment and confidence gauges in the euro area. Across the pond, the Conference Board’s Consumer Confidence will be the salient event as US markets returns to normalcy.

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. This view has been reinforced in recent ECB minutes, where the Council appeared unconvinced about a pick up in the economic activity in H2 2019. That said, 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, Italian politics has resurfaced as a source of uncertainty and volatility, all gyrating around the country’s discomfort with EU fiscal rules.

EUR/USD levels to watch

At the moment, the pair is retreating 0.05% at 1.1186 and faces the next support at 1.1142 (low May 21) seconded by 1.1107 (2019 low May 23) and finally 1.0905 (high Mar.27 2017). On the other hand, a breakout of 1.1215 (high May 27) would target 1.1233 (55-day SMA) en route to 1.1264 (monthly high May 1).