EUR/USD stays depressed near 1.1730, focus on the ECB

The shared currency remains well under pressure for yet another session and prompts EUR/USD to navigate the lower bound of the weekly range near 1.1700.

EUR/USD offered ahead of the ECB

EUR/USD sheds ground for the fourth consecutive session so far on Thursday, although it manages well to rebound from Wednesday’s weekly lows near the 1.1700 mark.

In the meantime, investors’ preference keeps leaning towards the safe havens, always in response to the unremitting advance of the pandemic and its impact on the global economy.

Furthermore, EUR/USD remains under pressure ahead of the ECB monetary policy meeting due later on Thursday. The single currency stays in the centre of the debate amidst rising bets for a dovish tilt at the central bank’s event, where the likeliness that the Governing Council announces further stimulus cannot be ruled out.

In the euro docket, Spanish advanced CPI is expected to rise 0.5% MoM in October and to contract 0.9% over the last twelve months. In Germany, the unemployment rate eased to 6.2% in October and the Unemployment Change went down by 35K. Earlier in the session, Italian Business Confidence improved to 95.6 this month while the Consumer Confidence eased a tad to 102.0.

Across the pond, the usual weekly Claims will take centre stage along with the preliminary reading from the Q3 GDP and September’s Pending Home Sales.

What to look for around EUR

EUR/USD loses momentum and retests the 1.1700 neighbourhood against the backdrop of a persistent inflows into the safe haven universe. The outlook on EUR/USD remains positive, however, and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), the so far cautious stance from the ECB and the solid position of the EMU’s current account. In addition, the probable “blue wave” following the US elections is deemed as a negative driver for the greenback and carries the potential to lend extra legs to the pair in the longer run.

EUR/USD levels to watch

At the moment, the pair is losing 0.08% at 1.1736 and faces the next support at 1.1688 (monthly low Oct.15) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9). On the other hand, a breakout of 1.1880 (monthly high Oct.21) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18).