- EUR/USD alternates gains with losses around 1.0800.
- German Industrial Production dropped more than 9% in March.
- Investors’ attention remains on US weekly Initial Claims.
The sentiment around the single currency leans towards the cautious tone in the second half of the week, with EUR/USD orbiting around the 1.08 level at the time of writing.
EUR/USD focused on data
Following three consecutive daily pullbacks, EUR/USD is now showing some signs of stabilization in the 1.0800 neighbourhood, always against the backdrop of the generalized side-lined mood in the global markets.
In fact, rising cautiousness among investors ahead of key US data on Friday are bolstering the ongoing rangebound in the pair, which keeps navigating the lower bound of the weekly range.
On another front, the European Commission published its Spring Forecasts on Wednesday and it now sees the economy of the region contracting 7.1% this year and rebounding sharply by around 6% in 2021. In the same line, the unemployment rate is expected to surge to 9.0% during the current year and drop to around 7.9% in the following year. Regarding inflation, consumer prices are forecasted to rise at an annualized 0.6% in 2020 and 1.3% in 2021.
Earlier on Thursday, the German Industrial Production recorded a record 9.2% contraction during March, while the same indicator dropped more than 16% in France during the same period, showing the devastating impact of the coronavirus on the economy.
Across the pond, the attention will be on the weekly Initial Claims, where more than 20 million US citizens have already filed for unemployment insurance.
What to look for around EUR
The euro appears to have met some decent contention in sub-1.0800 levels so far this week in a context of poor results from fundamentals in the region and a broad-based consolidation theme ahead of Friday’s US Payrolls. In the meantime, the attention in the Old Continent stays on the re-opening of some economies and the somewhat renewed optimism on the back of shrinking infected cases and deaths by the COVID-19, particularly in Spain and Italy.
EUR/USD levels to watch
At the moment, the pair is gaining 0.10% at 1.0802 and a breakout of 1.0950 (55-day SMA) would target 1.1019 (weekly/monthly high May 1) en route to 1.1028 (200-day SMA). On the other hand, the next down barrier emerges at 1.0782 (weekly low May 6) seconded by 1.0727 (monthly low Apr.24) and finally 1.0635 (2020 low Mar.23).