EUR/USD stays bid around 1.1240 ahead of ZEW


  • The pair trades in the upper end of the range near 1.1240.
  • German April CPI came in in line with preliminary prints.
  • ZEW survey in Germany, EMU coming up next.

The shared currency has started the session on a positive note and is now lifting EUR/USD to the area of daily highs in the 1.1240 region.

EUR/USD now looks to data, trade

Spot is so far reversing Monday’s negative performance and managed to retake the 1.1240 zone on the back of somewhat alleviated concerns over the US-China trade war.

In fact, trade jitters seem to have subsided somewhat after China announced retaliatory measures on Monday, including new tariffs on more than 5,000 products worth around $60 billion and starting on June 1.

In the data space, final German inflation figures tracked by the CPI for the month of April showed consumer prices rose 1.0% inter-month and 2.0% from a year earlier. Later in the day, the ZEW survey will shed more light on investors’ morale in Germany and the euro area.

Across the pond, Import/Export Prices, the NFIB index and speeches by FOMC’s J.Williams, E.George and M.Daly are also expected.

What to look for around EUR

Recent data in Euroland and Germany allowed market participants to believe that some healing process could be under way in the region amidst the ongoing slowdown. However, this scenario needs confirmation in the next months, while the current ‘neutral/dovish’ stance from the ECB is expected to persist for the reminder of the year and probable H1 2020. The broad-based risk-appetite trends and USD-dynamics are posed to rule the sentiment surrounding the European currency for the time being, all in combination with the onoging US-China trade dispute and potential US tariffs on EU products. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections in late May, as the populist option in the form of the far-right and the far-left movements appears to keep swelling among voting countries.

EUR/USD levels to watch

At the moment, the pair is gaining 0.10% at 1.1233 and a break above 1.1264 (high May 1) would target 1.1315 (100-day SMA) en route to 1.1323 (high Apr.17). On the downside, immediate support aligns at 1.1209 (21-day SMA) seconded by 1.1135 (low May 3) and finally 1.1109 (2019 low Apr.26).

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