EUR/USD under pressure near 1.0830, ZEW in sight

The demand for the single currency remains depressed for yet another week, with EUR/USD just managing to navigate above earlier YTD lows in the proximity of 1.0820, levels last visited in April 2017.

EUR/USD now looks to data

The persistent buying interest around the greenback and unabated concerns – albeit somewhat alleviated – surrounding the Chinese COVID-19 continue to hurt the sentiment around the European currency and maintain EUR/USD under permanent downside pressure.

In fact, occasional bullish attempts in EUR/USD remain contained around the 1.0850 region so far, as investors keep the preference for the greenback in the current context of exchanging risk appetite trends and in response to recent positive results from some US fundamentals (vs. poor readins from the European docket).

Moving forward, the euro will closely follow the results from the upcoming ZEW survey, which is expected to shed further detail on how the Economic Sentiment fared in both Germany and the broader Euroland during February.

Across the ocean, the NY Empire State index is expected along with the NAHB index and TIC Flows.

What to look for around EUR

There is no respite for EUR/USD in the first half of the week, which is now trading closer to the key support at 1.08 the figure amidst the generalized bearish view on the shared currency. In the meantime, USD-dynamics are expected to dictate the pair’s price action for the time being along with the broad risk trends, where the COVID-19 is still in the centre of the debate. On another front, the ECB is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change in the monetary policy before that time pretty flat. Further out, latest results from the German and EMU dockets continue to support the view that any attempt of recovery in the region remains elusive for the time being and is expected to keep weighing on the currency.

EUR/USD levels to watch

At the moment, the pair is advancing 0.09% at 1.0838 and faces the initial hurdle at 1.0957 (weekly high Feb.10) seconded by 1.0988 (21-day SMA) and finally 1.1069 (55-day SMA). On the downside, a breach of 1.0827 (weekly/2020 low Feb.14) would target 1.0814 (78.6% Fibo of the 2017-2018 rally) en route to 1.0569 (monthly low Apr.10 2017).