EUR/USD stays bid near 1.1040 ahead of data

The single currency keeps its shine intact at the end of the week, with EUR/USD hovering around the 1.1040 region in the wake of German data.

EUR/USD apathetic on another German disappointment

Spot has resumed the upside following Thursday’s inconclusive price action, coming under some selling pressure around multi-day highs in the 1.1080/85 band, where coincides the 21-day SMA.

The weekly recovery in the pair comes on the back of renewed and quite strong sell off in the buck after the poor print from the ISM manufacturing on Tuesday re-ignited fears that the US economy could slip into a recession in the longer term.

In addition, trade jitters now look somewhat alleviated after Chinese and US negotiators are expected to resume talks early in October in Washington.

EUR looks quite firm today despite the German docket registered another disappointing results after Industrial Production contracted at a monthly 0.6% during July, showing that any signs of recovery in the sector would have to wait longer.

Later in the day, EMU final GDP figures are due seconded by the employment gauge in the region. Across the pond, Non-farm Payrolls for the month of August should grab all the attention.

What to look for around EUR

Spot is extending the recovery from 2019 lows near 1.0920 (Monday) amidst somewhat renewed optimism on the US-China trade front and the fresh offered bias surrounding the buck. However, the ongoing up move is seen as corrective only, as recent poor prints from the domestic docket keep the pressure intact on the single currency and strengthened further the need for ECB stimulus, which is likely to be delivered at the bank’s meeting later this month. This view is also expected to keep occasional bullish attempts well contained for the time being. On the political front, Italian effervescence looks dissipated for the time being, while concerns over a Brexit ‘no deal’ scenario look somehow mitigated across the Channel.

EUR/USD levels to watch

At the moment, the pair is gaining 0.03% at 1.1037 and faces the next barrier at 1.1084 (high Sep.5) followed by 1.1163 (high Aug.26) and finally 1.1172 (55-day SMA). On the flip side, a breach of 1.0925 (2019 low Sep.3) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017).