EUR/USD remains under pressure near 1.1140 ahead of PMIs

Sellers keep dominating the sentiment around the European currency and are now forcing EUR/USD to recede to fresh 2-month lows in the 1.1140 region.

EUR/USD looks to data, ECB

Spot is down for the fourth consecutive session so far on Wednesday, as market participants continue to gauge the likeliness that the ECB could pump more stimulus in the region in the near term. In this regard, it is worth noting that bets for such announcements by the central bank at tomorrow’s meeting remain on the rise.  

Collaborating with the sour mood around the pair, the greenback stays well supported by a change of heart from investors, who keep pricing in a 25 bps interest rate cut by the Fed at its meeting on August 1 instead of a larger cut.

Furthermore, the resumption of US-China trade talks and the recent deal to avoid the US debt ceiling have been also lending oxygen to the buck and undermining any serious attempt of recovery in spot.

In the docket, key advanced PMIs in core Euroland are due later in the morning. Across the pond, flash PMIs are also due seconded by housing data and the EIA report.

What to look for around EUR

Rising odds for fresh monetary easing by the ECB later in the week - in the form of interest rate cuts, the resumption of the QE programme and potential changes in the forward guidance - have been hurting the mood in EUR while keeping buyers at bay at the same time. The deep pullback in the pair now carries the potential to visit yearly lows in the 1.1100 neighbourhood. In this regard, today’s results from flash PMIs for the current month should be key.

EUR/USD levels to watch

At the moment, the pair is retreating 0.03% at 1.1147 and faces immediate contention at 1.1116 (monthly low May 30) seconded by 1.1109 (low Apr.26) and finally 1.1106 (2019 low May 23). On the upside, a breakout of 1.1286 (high Jul.11) would target 1.1311 (200-day SMA) en route to 1.1412 (high Jun.25).