EUR/USD heading back towards 1.1300 as USD rebound gains traction
- EUR/USD extends losses below 1.1400 amid USD rebound.
- ECB rate cut expectations this week undermine the EUR.
- Focus on EU GDP and risk sentiment for fresh impetus.
EUR/USD extends the Asian retreat below the 1.1400 level into early European trading, as the US dollar recovery gathers steam across the board, with bears now targeting 1.1300 ahead of the Eurozone GDP release.
The risk recovery remains the key theme in Asia this Tuesday, as market mood improves amid a relief rally seen in the US Treasury yields and S&P 500 futures that mainly lifted the greenback broadly higher from the lowest level since September 2018 reached on Monday at 94.66.
The major also remains pressured by the increased odds of a rate cut likely to be delivered by the European Central Bank (ECB) this Thursday, which undermines the sentiment around the shared currency. Its worth noting that Eurozone money markets now price in two rate cuts from the European Central Bank (ECB) by June vs. one last week.
This comes in an effort to combat the economic fallout from the coronavirus outbreak. Further, a bigger-than-expected drop in the Eurozone Sentix Investor Confidence for March, a lead indicator, also continues to remain a drag on the EUR.
Looking ahead, the immediate focus remains on the Eurozone final GDP revision while the broad market sentiment and USD dynamics will continue to play a pivotal role amid persisting virus risks.
EUR/USD technical levels to watch