- EUR/USD loses the grip and recedes to 1.1815/10 band.
- Dovish ECB-speak weighs on the single currency.
- US NY Empire State Index ticked lower to 6.50 in November.
Following earlier daily tops in the 1.1870 region, sellers stepped in and dragged EUR/USD to as low as the 1.1815/10 band as Monday’s European session draws to a close.
EUR/USD offered on ECB-speak
EUR/USD trades slightly in the negative territory after ECB-speak showed members continue to favour further easing in the short-term horizon.
In fact, ECB’s Board member De Cos reiterated the upcoming recalibration of the bank’s policy tools should be focused on the PEPP and TLTROs, adding that FX moves is something to worry about.
Earlier, Board member Centeno said that public support should be temporary in the current pandemic context.
In the same direction, Bundesbank officials did not rule out that the German economy could shrink/stagnate in the October-December period. And the icing on the cake came from Hungary’s Orban, who said the country will veto the EU budget and Recovery Fund vote.
What to look for around EUR
EUR/USD extends further north the recent breakout of the 1.18 mark at the beginning of the week. In the very near-term, however, EUR/USD is expected to remain under scrutiny on dollar dynamics mainly coming from the US post-elections scenario and the progress of the coronavirus pandemic. On the more domestic front, the euro appears propped up by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), although the now more dovish stance from the ECB prompts some caution when comes to bullish attempts. As usual, the euro still looks supported by the solid position of the EMU’s current account.
EUR/USD levels to watch
At the moment, the pair is losing 0.02% at 1.1832 and faces the next support at 1.1745 (weekly low Nov.11) followed by 1.1709 (Fibo level of the 2017-2018 rally) and finally 1.1602 (monthly low Nov.4). On the upside, a break above 1.1920 (monthly high Nov.9) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1).
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