EUR/USD unfazed by German data, still below 1.1000

After recording fresh 3-week highs in the 1.1050 region during early trade, EUR/USD met some selling pressure and it has now receded to the 1.0990 area, giving away daily gains at the time of writing.

EUR/USD looks to data, coronavirus, USD

Following Thursday’s strong advance, EUR/USD has started Friday’s session with optimism, although sellers might have reminded markets that the ongoing recovery could be (only) temporary (and thus an opportunity to short the pair?).

In the docket, EUR remained largely apathetic after preliminary inflation figures in Germany showed the CPI is expected to rise 0.4% MoM and 1.7% YoY during February. Earlier, the German labour market figures surprised to the upside (just a bit), while preliminary CPI in Italy noted inflationary pressures remain muted.

Across the ocean, Personal Income/Spending are due along with January’s inflation figures tracked by the PCE, advanced Trade Balance results, the Chicago PMI and the final February gauge of the US Consumer Sentiment. In addition, St. Louis Fed J.Bullard (2022 voter, dovish) will discuss Economy and Monetary Policy.

What to look for around EUR

EUR/USD keeps the bid bias unchanged so far this week on the back of upbeat data in Germany and renewed (and strong) selling impetus around the buck. As usual, USD-dynamics are seen dictating the pair’s price action for the time being along with the broader risk appetite trends, where the COVID-19 remains in centre stage. 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, recent better-than-expected results in both Germany and the broader Euroland seems to have lifted spirits among traders regarding some recovery in the region.

EUR/USD levels to watch

At the moment, the pair is losing 0.11% at 1.0988 and a breakdown of 1.0988 (low Feb.28) would target 1.0914 (21-day SMA) en route to 1.0879 (monthly low Oct.1 2019). On the other hand, the next hurdle is located at 1.1053 (weekly high Feb.28) seconded by 1.1063 (61.8% Fibo of the 2020 drop) and finally 1.1098 (200-day SMA).