EUR/USD upside falters around 1.1350, trade, FOMC on sight

After advancing to session peaks in the mid-1.1300s, EUR/USD has come under some selling pressure and is now trading in the 1.1340 region.

EUR/USD looks to trade, FOMC

The pair is struggling for direction near 1.1350 amidst a generalized sideline theme in the global markets and persistent low volatility.

Optimism over the US-China ongoing trade negotiations has been sustaining the better mood in the riskier assets as of late, putting the greenback under extra pressure and lifting spot from Friday’s YTD lows in the 1.1235/30 band.

In the data space, German Producer Prices rose 0.4% MoM during January and 2.6% from a year earlier, both prints coming in above previous estimates. Moving forward, the FOMC minutes will be published later in the NA session, with all the attention on the Committee’s stance on the balance sheet reduction and the probable re-assessment of the Fed’s rate path for the current year.

What to look for around EUR

US-China trade talks will be in centre stage this week and are expected to drive the sentiment in the risk-associated complex. Following recent progress in earlier talks, market participants are now looking at the possibility that both parties could clinch a deal sooner than later. Still on the trade front, EUR is expected to face renewed winds from the likeliness of tariffs on US imports of EU cars. On another direction, EUR should closely follow comments from ECB members regarding the ongoing slowdown in the euro bloc and potential guidance from the ECB in the next months, at a time when speculations that the central bank could refrain from acting on rates this year remain on the rise.

EUR/USD levels to watch

At the moment, the pair is gaining 0.03% at 1.1343 and faces the next hurdle at 1.1355 (high Feb.20) seconded by 1.1382 (55-day SMA) and then 1.1398 (100-day SMA). On the downside, a break below 1.1309 (10-day SMA) would aim for 1.1234 (2019 low Feb.15) and finally 1.1215 (2018 low Nov.12).