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EUR/USD trades at fresh 2020 lows below 1.0900

  • US Dollar Index pares early losses, closes in on 99.
  • FOMC Chairman Powell says nothing about US economy is "out of kilter."
  • Industrial Production in euro area contracts 4.1% in 2019.

The EUR/USD pair spent a large portion of the day consolidating in a tight range above the 1.09 mark but lost its traction during the American trading hours and slumped to its lowest level since early October at 1.0886. As of writing, the pair was trading at 1.0891, erasing 0.22% on a daily basis.

Euro struggles to stage a meaningful recovery

Earlier in the day, the data published by the Eurostat revealed that Industrial Production in the euro area contracted by 4.1% in 2019 and came in worse than the market expectation for a decline of 2.3%. However, the greenback's uninspiring performance allowed the pair to stay in the positive territory.

With the USD gathering strength in the second half of the day, the pair turned south and now remains on track to post its lowest daily close of 2020.

Although there weren't any significant macroeconomic data releases featured in the US economic docket, the upsurge seen in the US Treasury bond yields and FOMC Chairman Powell's relatively remarks helped the USD find demand.

While testifying before the Senate Banking Committee in Washington, Powell said there was nothing about the current US economy was was "out of kilter or unbalanced." The US Dollar Index, which dropped to 98.70 on Wednesday, is now up 0.15% on the day at 98.90. 

On Thursday, inflation data from Germany and the US will be looked upon for fresh catalysts. Analysts expect the annual core CPI in the US to tick down to 2.2% in January from 2.3%.

Technical levels to watch for

 

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