EUR/USD weaker, challenges 1.1000 ahead of US data

  • EUR/USD sheds gains and approaches 1.1000
  • Dollar recovers ground and weighs on the pair.
  • US PCE, U-Mich next of relevance later in the NA session.

After hitting fresh 2-week tops in the area just below 1.1100 the figure during early trade, EUR/USD came under some selling pressure and it has now returned to the vicinity of the 1.10 mark at the time of writing.

EUR/USD looks to data, COVID-19

EUR/USD is halting five consecutive sessions with gains at the end of the week, as the greenback is now staging a mild recovery following the recent steep decline post-YTD tops recorded on Monday.

In the meantime, the pair has managed to revisit the vicinity of the critical 200-day SMA in the 1.1080/85 band, while the constructive bias seems to have returned following the breakout of the key 55-day SMA, today at levels just above 1.10 the figure.

It is worth recalling that the pair’s strong rebound was almost exclusively in response to the latest round of Fed’s easing, involving purchases of Treasuries and MBS, while the US House of Representatives will vote later today on the $2 trillion COVID-19 aid package.

Later in the docket, Personal Income/Spending, the final March print of the Consumer Sentiment and inflation figures measured by the PCE will be in the limelight across the pond.

What to look for around EUR

The rally in EUR/USD appears to have met some interesting hurdle in the vicinity of the 1.1100 barrier so far, sparking some corrective downside in consequence. In the meantime, dynamics around the greenback plus developments from the COVID-19 are expected to keep ruling the price action in the pair. On the macro view, better-than-forecasted PMIs in both Germany and the broader Euroland opened the door to some respite in the prevailing downtrend in fundamentals in the region, although the underlying stance still remains well on the negative side.

EUR/USD levels to watch

At the moment, the pair is losing 0.18% at 1.1010 and faces the next support at 1.0814 (78.6% Fibo of the 2017-2018 rally) followed by 1.0635 (2020 low Mar.23) and finally 1.0569 (monthly low Apr.10 2017). On the flip side, a break above 1.1086 (high Mar.27) would target 1.1186 (61.8% Fibo of the 2017-2018 rally) en route to 1.1239 (monthly high Dec.21 2019).

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