- EUR/USD meets support in the 1.1200 region.
- The greenback remains firm near daily highs.
- ECB event takes centre stage later this week.
After bottoming out in the boundaries of 1.1200 the figure, EUR/USD managed to regain some composure and is now back to the 1.1215/20 band.
EUR/USD focused on ECB
The pair remains well supported in the 1.1200 neighbourhood so far today amidst the continuation of the buying bias around the buck and some fresh hopes on a US-China trade deal.
In fact, latest news cites US negotiators – including S.Mnuchin and R.Lighthizer – could be heading to Beijing at some point next week. Talks are thus expected to resume for the first time since the G-20 gathering.
Later in the week, investors will closely follow the ECB event, as the central bank could announce a new set of monetary stimulus oriented to re-ignite inflation pressures and tackle the ongoing economic slowdown in the bloc.
Data wise later in the week, advanced PMIs in core Euroland will also be in the limelight as well as the German IFO indicator.
What to look for around EUR
The inability of the pair to clear the important resistance area in 1.1280/90 has encouraged sellers to return to the markets, triggering several tests of the 1.1200 handle, albeit failing to move further south. Further out, occasional bullish attempts should be seen as a short-lived against the backdrop of renewed and increasing speculations of another wave of monetary stimulus from the European Central Bank as early as this week’s meeting, including interest rate cuts, the resumption of the QE programme and potential changes in the forward guidance.
EUR/USD levels to watch
At the moment, the pair is advancing 0.01% at 1.1221 and a breakout of 1.1286 (high Jul.11) would target 1.1315 (200-day SMA) en route to 1.1412 (high Jun.25). On the flip side, immediate contention is located at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23).
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