EUR/USD drops to daily lows near 1.1220 ahead of ECB
- The pair comes under pressure on USD-buying.
- DXY moves higher and clinched highs near 97.20.
- ECB minutes coming up next in the calendar.
A bout of fresh buying interest around the greenback is forcing EUR/USD to recede to the 1.1220 region, recording at the same time fresh daily lows.
EUR/USD looks to ECB
Sellers around the shared currency appear to have regained the upper hand in the second half of the week, pushing spot to the area closer to the key support at 1.1200 the figure during the European morning.
EUR has initially suffered another disappointing results from the German docket, where Factory Orders contracted sharply by 4.6% in February from a month earlier, all adding to last week’s poor prints from advanced inflation figures.
Moving forward, the ECB minutes are next on tap, where all the attention will be on discussions over the announced TLTRO-III and members’ views regarding the new (and lower) forecasts for inflation and growth in the region.
What to look for around EUR
In spite of the ongoing corrective rebound, EUR remains under pressure following poor results in Euroland. In fact, recent disappointing readings in the region somehow confirm that the slowdown in the bloc and the ‘patient-for-longer’ stance from the ECB could be among us for longer than expected. Against the backdrop of souring risk-appetite trend, the greenback should emerge stronger and is expected to keep weighing on spot for the time being. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.
EUR/USD levels to watch
At the moment, the pair is retreating 0.05% at 1.1226 and faces the next support at 1.1183 (low Apr.2) followed by 1.1176 (low Mar.7) and finally 1.1118 (monthly low Jun.20 2017). On the upside, a breakout of 1.1254 (high Apr.1) would target 1.1277 (21-day SMA) en route to 1.1338 (200-week SMA).