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EUR/USD: Downside Pressure Persists

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EUR/USD: Downside Pressure Persists
  • Sour mood prevails around the pair on US-China trade concerns.
  • The European Commission will publish its Spring forecasts tomorrow.
  • Sentix Index, Services PMIs in the limelight later today.

The US-China trade talks have unexpectedly shifted their direction in past hours, with President Trump opening the door to potential extra tariffs and China threatening to back out from the negotiation table, all denting the recent optimism around EUR/USD.

The recent upside momentum in spot has been sustained by auspicious data releases in both Germany and the broader euro area, hinting at the likelihood that a rebound in activity could lie further ahead. These hopes were further supported by dovish comments on US inflation from Fed officials along with the apparent absence of traction in wage inflation, as per Friday’s Payrolls numbers.

Today, final Services PMIs in Euroland are unlikely to move the dial in the markets, while the Sentix index is expected to shed further light on the investors’ morale in the region.

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In the meantime, the bearish bias is expected to prevail in EUR/USD as long as it trades below the multi-month resistance line off September highs beyond 1.1800 the figure, today in the 1.1320 region. Against this backdrop, another test of YTD lows in the 1.1100 neighbourhood should not come as a surprise. On the upside, the 1.1270 region emerges as the interim resistance, where coincide last week’s peaks and the 55-day SMA. Downside pressure is expected to mitigate somewhat if this hurdle is cleared in the near term.

Image sourced from Pixabay

 

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Posted-In: EUR/USD European UnionNews Eurozone Forex Global Markets General

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