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EUR/USD trades on a firm note near 1.1370

  • The pair manages to rebound from lows near 1.1300.
  • The recovery in the greenback stalled ahead of 97.00.
  • ADP report, ISM Manufacturing next of relevance in the US.

After bottoming out in the vicinity of 1.1300 the figure during overnight trade, EUR/USD found fresh buyers and is now posting some decent gains in the 1.1355/60 band ahead of the opening bell in the Old Continent.

EUR/USD looks to risk trends, data

Spot is trading on a better mood so far in the second half of the week, although it remains under pressure in light of the recent sharp drop in yields of the German Bunds, the recovery in the buck and news from the Italian banking sector.

In fact, EUR suffered on Wednesday after the ECB put the 10th largest Italian bank under administration, all amidst a wave of risk-off trade and declining yields in German money markets.

Data wise today, the salient events will be across the pond with the release of the jobs figures in the US private sector gauged by ADP followed by the always-relevant ISM Manufacturing.

What to look for around EUR/USD

Spot charted a bearish ‘outside’ day on Wednesday, hinting at the likelihood that further weakness could lie ahead in the near term. In the broader picture, President Trump said that the government shutdown will remain for ‘as long as it takes’. Further out, the US-GE 10-year yield spread is back to the fore as driver of the price action, while the broad risk appetite trends should continue to drive the sentiment.

EUR/USD levels to watch

At the moment, the pair is gaining 0.22% at 1.1366 facing the next up barrier at 1.1397 (10-day SMA) seconded by 1.1479 (100-day SMA) and finally 1.1547 (high Jan.1). On the flip side, a breakdown of 1.1309 (2019 low Jan.2) would target 1.1268 (monthly low Dec.14 2018) en route to 1.1214 (2018 low Nov.12).

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