EUR/USD turns negative near 1.1780, G-7 meeting eyed

The pair comes down after testing tops near 1.1850 on Thursday.
The greenback remains sidelined near 93.40 after bottoming out at 93.20.
German Industrial Production contracted 1.0% MoM in April.

Pablo Piovano FXStreet

After clinching fresh tops in the key area around 1.1840 on Thursday, EUR/USD has now receded to the 1.1800 neighbourhood, where it is looking to stabilize.

EUR/USD stays bolstered by ECB speculations

The pair is looking to extend its squeeze higher for the fifth consecutive session today, advancing almost uninterruptedly since Monday, as the Italian political waters appear calmer while the ECB-taper story continues to underpin the sentiment around EUR.

In fact, the weekly recovery in EUR appears propped up by recent comments by ECB officials, all seen the central bank ending the ongoing QE programme at some point by year-end, while the first rate hike remains on the cards during H2 2019.

That said, the upcoming ECB meeting has been growing in importance. However, there is still room for disappointment, as Euroland keeps showing signs of deceleration and core inflation figures appears steady despite the latest report showing a (temporary?) rebound.

In the data space, Germany Industrial Production contracted more than expected 1.0% MoM in April and the trade deficit shrunk to €19.4 billion during the same period.

There is no data releases scheduled across the pond, although all the attention will be on the G-7 meeting on June 8-9 with the ongoing trade conflicts in centre stage.

EUR/USD levels to watch

At the moment, the pair is losing 0.10% at 1.1787 and a break below 1.1747 (21-day sma) would target 1.1718 (low dec.12 2017) en route to 1.1695 (10-day sma). On the flip side, the next hurdle is located at 1.1840 (high Jun.7) followed by 1.1854 (38.2% Fibo of 1.2413-1.1508) and finally 1.1998 (high May 14).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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