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EUR/USD looks for direction near 1.1140

  • EUR/USD keeps hovering around the 200-day SMA.
  • The pair remains sidelined, in line with global assets.
  • US Industrial Production, U-Mich index next of relevance.

The single currency is alternating gains with losses at the end of the week, motivating EUR/USD to navigate within the a tight range near the 1.1140 region.

EUR/USD looks to data and the 200-day SMA

The pair is looking to leave behind Thursday’s pullback amidst the generalized rangebound theme prevailing in the global markets.

Spot lost some upside momentum during Thursday’s session after positive data results from the US calendar gave unexpected oxygen to the buck and encouraged the US Dollar Index (DXY) to rebound from weekly lows, all following the signing of the US-China’s ‘Phase 1’ trade deal.

Friday’s docket in Euroland includes November’s Current Account figures, whereas the calendar is much more interesting across the pond with the publication of Industrial and Manufacturing Production figures, JOLTS Job Openings, Capacity Utilization, Housing Starts, Building Permits and the flash print of the U-Mich index for the month of January.

What to look for around EUR

The pair has briefly left behind the key resistance area around 1.1140 and managed to clinch weekly tops near 1.1180, although the move lacked follow through. In the meantime, markets’ focus is now seen shifting to a more data-dependent stance while China and the US warm up for the ‘Phase 2’ negotiations. On the more macro view, the slowdown in the region remains far from abated and continues to justify the ‘looser for longer’ monetary stance from the ECB, which is expected to maintain the current ‘wait-and-see’ stance, at least in the near-term, as per the recently published minutes (Accounts) from the December meeting.

EUR/USD levels to watch

At the moment, the pair is losing 0.01% at 1.1134 and a breach of 1.1094 (55-day SMA) would target 1.1085 (2020 low Jan.10) en route to 1.1064 (low Dec.20 2019). On the flip side, the next resistance lines up at 1.1172 (weekly high Jan.16) seconded by 1.1186 (61.8% of the 2017-2018 rally) and finally 1.1199 (high Dec.13 2019).

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