EUR/USD weaker, drops to daily lows near 1.1030

EUR/USD tumbles and extends losses to the 1.1030 region.
The better tone in the dollar weighs on the pair.
German flash CPI came in at 0.1% MoM in March.

Pablo Piovano FXStreet

The selling pressure around the shared currency is now picking up pace and is dragging EUR/USD to the area of daily lows near 1.1030.

EUR/USD offered on USD-strength

EUR/USD keeps correcting lower at the beginning of the week and is already shedding nearly a cent since earlier tops around 1.1150 to the current 1.1030 zone.

The renewed and moderate upbeat sentiment surrounding the greenback has been weighing on the pair since early in the Asian trading hours, all amidst month-end flows, funding jitters and concerns around liquidity in a context where developments from the COVID-19 keep dictating the price action in global assets.

In the domestic calendar, the Consumer Confidence in the broader Euroland deteriorated further to -11.6 in March, the advanced Spanish CPI is seen contracting 0.3% MoM during March and German flash inflation figures are expected to gain 0.1% inter-month during the same period.

Nothing relevant across the pond, where Pending Home Sales and the Dallas Fed index are only due for release later in the NA session.

What to look for around EUR

The rally in EUR/USD appears to have met some interesting hurdle in the vicinity 1.1150 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 0.93% at 1.1027 and faces the next support at 1.1008 (55-day SMA) seconded by 1.0992 (monthly low Jan.29) and finally 1.0814 (78.6% Fibo of the 2017-2018 rally). On the flip side, a break above 1.1147 (weekly 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).

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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