EUR/USD stays under pressure, approaches 1.1150

The sentiment around the European currency remains depressed at the beginning of the week and is pushing EUR/USD to the mid-1.1100s following the opening bell in the Old Continent.

EUR/USD looks to trade, data

Spot is losing ground uninterruptedly since last Monday amidst rising effervescence in the US-China trade universe, declining yields in the European money markets and a generalized risk-off mood.

In fact, the pair has accelerated its recent break below the critical support at 1.1200 the figure and it has now shifted the attention to a probable visit of 2019 lows in the 1.1100 neighbourhood.

In the calendar, German Producer Prices rose 0.5% on a monthly basis during April and 2.5% from a year earlier, all prints coming in above expectations. Later in the session, EMU’s Current Account figures will close the docket along with the speech by ECB’s P.Praet.

Across the pond, the Chicago Fed National Activity index is only due seconded by speeches by FOMC’s Harker, Williams and Powell.

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. In the meantime, 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, Italy has re-emerged as a source of uncertainty and volatility, while investors’ focus has now shifted to the EU parliamentary elections next week.

EUR/USD levels to watch

At the moment, the pair is losing 0.03% at 1.1153 and faces the next support at 1.1135 (low May 3) seconded by 1.1109 (2019 low Apr.26) and finally 1.0839 (monthly low May 2017). On the other hand, a break above 1.1242 (55-day SMA) would target 1.1264 (high May 1) en route to 1.1305 (100-day SMA).