- The upside in EUR/USD meets resistance in the mid-1.1100s.
- Dollar weakness keeps sustaining the move up in the pair.
- EMU Core CPI came in higher than expected in February.
After recording fresh 8-week highs in the 1.1180 region on Monday, EUR/USD sparked some correction and it has now returned to the 1.1120 area.
EUR/USD focused on COVID-19, data
The pair is shedding some ground in the 1.1120 region at the time of writing, coming under pressure and for the first time after three consecutive daily advances.
The European currency has practically ignored the final February inflation figures in the broader Euroland, where headline consumer prices rose 0.2% MoM and 1.2% from a year earlier. Core CPI gained 1.2% over the last twelve months and rose 0.4% inter-month.
In the meantime, market participants remain cautious ahead of the potential “coordinated easing” from G7 central banks in order to mitigate the impact of the Chinese coronavirus on the main economies. The conference call is scheduled for 1200GMT.
What to look for around EUR
EUR/USD keeps the bid bias unchanged for yet another week in response to the increasing selling pressure 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 coronavirus fears remain 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 appear to have re-ignited some optimism among investors regarding the possibility of some recovery in the region and the currency. This view is also supported by rumours of fiscal stimulus in Germany.
EUR/USD levels to watch
At the moment, the pair is losing 0.13% at 1.1119 and a breakdown of 1.1036 (55-day SM) would target 1.0992 (monthly low Jan.29) en route to 1.0919 (21-day SMA). On the flip side, the next hurdle lines up at 1.1185 (weekly/monthly high Mar.2) seconded by 1.1199 (high Dec.13 2019) and finally 1.1239 (monthly high Dec.31 2019).