EUR/USD keeps the bid tone around 1.1100

• EUR/USD advanced to the 1.1105/10 band on Monday.
• EMU M3 Money Supply expanded 5.5% YoY in September.
• Markets’ attention remains on Brexit, FOMC, data this week.

The buying interest around the European currency has re-emerged on Monday and lifted EUR/USD back above the 1.1100 handle, although the up move lacked of follow trough in the vicinity of 1.1110.

EUR/USD daily upside capped by the 10-day SMA

The recent decline in spot is seen some respite so far on Monday, regaining upside traction and rebounding from Friday’s weekly lows in the 1.1070 region. Today’s correction higher, however, met resistance in the 1.1110 region, where sits the 10-day SMA.

Renewed selling pressure around the buck has been propping up the recovery in the pair to levels beyond 1.1100 the figure, while optimistic headlines around the Brexit negotiation has also lent extra wings to the pair.

In the data space, M3 Money Supply in the euro area expanded at annualized 5.5%, below estimates. Earlier in the day, German Import Prices rose 0.6% MoM in September. Later in the week, the focus of attention will be on the release of the advanced CPI figures for the current month in Euroland along with US Payrolls.

What to look for around EUR

Renewed weakness around the single currency dragged spot to fresh lows in the 1.1070 region, where it is now looking to rebound from. Despite the recent rally in spot has been exclusively sponsored by weakness in the Dollar, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh on EUR in the short/medium term horizon.

EUR/USD levels to watch

At the moment, the pair is gaining 0.14% at 1.1093 and faces the next up barrier at 1.1128 (100-day SMA) seconded by 1.1171 (monthly high Oct.18) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the other hand, a breach of 1.1072 (low Oct.25) would target 1.1041 (55-day SMA) en route to 1.0925 (low Sep.3).