EUR/USD stays side-lined around 1.1020 ahead of data
- EUR/USD remains on the defensive above the 1.10 mark.
- The pair comes down after hitting 1.1150 on Monday.
- German labour market figures, EMU CPI coming up next.
The single currency extends the pessimism at the beginning of the week and forces EUR/USD to come under extra downside pressure following recent peaks in the mid-1.1100s.
EUR/USD weaker on USD-rebound, looks to data
EUR/USD is losing ground for the second session in a row on Tuesday, prolonging the downbeat mood seen at the beginning of the week and always against the backdrop of quite a moderate improvement surrounding the buck.
Indeed, month/quarter-end flows and some stress re-emerging around the dollar funding earlier in the Asian trading hours have been sustaining the recovery in the buck and pushed the DXY to fresh 2-day highs near 99.60, where it run out of steam.
In the data space, German Import Prices contracted 0.9% MoM during February and 2.0% over the last twelve months, all ahead of the release of the more relevant labour market report later in the session. In the broader euro zone, flash inflation figures for the month of March will also see the light later on Tuesday. Across the pond, the always-relevant Consumer Confidence tracked by the Conference Board is due seconded by the S&P/Case-Shiller index.
What to look for around EUR
The rally in EUR/USD appears to have met some interesting hurdle in the vicinity 1.1150 so far, sparking some corrective downside in consequence. In the meantime, dynamics around the greenback plus developments from the COVID-19 are expected to keep ruling the price action in the pair. On the macro view, recent better-than-forecasted PMIs in both Germany and the broader Euroland opened the door to some respite in the prevailing downtrend in fundamentals in the region, although the underlying stance still remains well on the negative side.
EUR/USD levels to watch
At the moment, the pair is losing 0.25% at 1.1015 and faces the next support at 1.0983 (weekly low Mar.31) seconded by 1.0964 (38.2% Fibo retracement of the March drop) and finally 1.0814 (78.6% Fibo of the 2017-2018 rally). On the flip side, a break above 1.1079 (200-day SMA) would target 1.1147 (weekly high Mar.27) en route to 1.1186 (61.8% Fibo of the 2017-2018 rally).