EUR/USD fades the spike to 1.1050 ahead of data, ECB-speak
- EUR/USD met support near 1.1030 on Wednesday.
- Risk-on trade keeps dominating the global sentiment.
- ECB’s C.Lagarde, L. de Guindos, P.Lane due to speak later.
After bottoming out in the proximity of 1.1030, EUR/USD has sparked a correction higher to the 1.1050 region on Wednesday.
EUR/USD looks to data, ECB
The pair remains on the defensive so far this week, coming under selling pressure after hitting fresh weekly tops in the boundaries of 1.1100 the figure last Friday.
The renewed sentiment surrounding the risk complex stays underpinned by ebbing concerns around the Wuhan coronavirus, which continues to support the exodus from safe havens and sponsor the move up in yields.
In the docket, final Services/Composite PMIs in Euroland for the month of January came in on the positive side ahead of December’s Retail Sales in the bloc due later. In addition, ECB’s Largarde, de Guindos and Lane are due to speak.
Across the pond, the employment report tracked by ADP is due seconded by the ISM Non-Manufacturing and the speech by FOMC’s permanent and dovish member L.Brainard.
What to look for around EUR
The pair remains on the defensive so far this week after faltering just ahead of the 1.1100 mark in past days. As usual, dynamics around the buck are expected to remain the exclusive driver of the pair’s price action for the time being along with alternating risk appetite trends in response to developments from the Wuhan coronavirus. On another scenario, the ECB is expected to finish its strategic review (announced last Thursday) by year-end, leaving speculations of any change of the monetary policy before that time pretty flat. Further out, some better-than-expected results in the euro region as of late seem to have lent support to the idea that the bloc could have left the worst behind, although that view looks premature, to say the least.
EUR/USD levels to watch
At the moment, the pair is losing 0.04% at 1.1038 and a breakdown of 1.1032 (weekly low Feb.4) would target 1.0992 (weekly/2020 low Jan.29) en route to 1.0981 (monthly low Nov.29 2019). On the flip side, the initial hurdle emerges at 1.1068 (100-day SMA) seconded by 1.1094 (weekly high Jan.31) and finally 1.1118 (weekly high Jan.21).