EUR/USD depressed near 1.1130 ahead of IFO, ECB

The shared currency remains depressed so far this week, with EUR/USD navigating the area of 2-month lows around 1.1130.

EUR/USD looks to data, ECB

Spot is down for the fifth consecutive session so far on Thursday, always amidst persistent speculations that the ECB could implement a fresh round of monetary stimulus at today’s meeting.

Adding to the sour sentiment in EUR, flash PMIs for the month of July released on Wednesday surprised to the downside, signaling that there is no light at the end of the tunnel for the euro area just yet.

Other than the ECB event, investors will also look to the results from the German IFO indicator for the current month, where traders are anticipating some weakness in line with the recent poor prints from advanced PMIs.

Across the pond, Durable Goods Orders, Initial Claims and Trade Balance figures will also keep the focus on the buck.

What to look for around EUR

Rising odds for fresh monetary easing by the ECB today - in the form of interest rate cuts, the resumption of the QE programme and potential changes in the forward guidance - have been hurting the mood in EUR while keeping buyers at bay during past sessions. The deep pullback and the current bearish outlook now carries the potential to force the pair to visit yearly lows in the 1.1100 neighbourhood at some point in the next days.

EUR/USD levels to watch

At the moment, the pair is retreating 0.04% at 1.1135 and faces immediate contention at 1.1116 (monthly low May 30) seconded by 1.1109 (low Apr.26) and finally 1.1106 (2019 low May 23). On the upside, a breakout of 1.1286 (high Jul.11) would target 1.1309 (200-day SMA) en route to 1.1412 (high Jun.25).