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EUR/USD struggles for direction below 1.1100 ahead of ZEW

  • EUR/USD is looking to regain the 1.11 mark.
  • Risk-off trade continues to prevail in global markets.
  • German, EU ZEW Survey next of relevance in the region.

The single currency is debating for a clear direction on Tuesday, taking EUR/USD to the area just below the key barrier at 1.1100 the figure.

EUR/USD now looks to data

The pair is trading a tad higher than Monday’s fresh 2020 lows in the 1.1080/75 band, looking to extend the rebound and regain both the key 1.1100 mark and the 55-day SMA, today at 1.1091.

The resurgence of the risk-off sentiment in the global markets is putting the greenback under downside pressure so far on Tuesday, allowing at the same time some respite for the pair in light of Friday’s sharp pullback.

In the euro-docket, the publication of the ZEW Survey in both Germany and the broader euro area will give a gauge of the economic sentiment in both regions for the current month. Across the pond, there is nothing significant in the calendar.

What to look for around EUR

The pair dropped to fresh yearly lows and lingers over the key 55-day SMA so far this week and always looking to USD-dynamics. Furthermore, the recent price action suggests that the 1.1180 region could be an interim top. In the meantime, markets’ focus is now seen shifting to a more data-dependent stance while the US-China trade front remains muted for the time being. 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 gaining 0.02% at 1.1096 and faces the next up barrier at 1.1134 (200-day SMA) followed by 1.1172 (weekly high Jan.16) and finally 1.1186 (61.8% of the 2017-2018 rally). On the downside, a breakdown of 1.1076 (weekly/2020 low Jan.20) would target 1.1066 (100-day SMA) en route to 1.1039 (low Dec.6 2019).

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