EUR/USD Forecast: leaps to session tops near 1.1080
- EUR/USD moves higher and clinches tops near 1.1080.
- DXY eases from earlier tops and return to 97.80.
- German Industrial Production contracted 0.6% MoM in September.
A bout of dollar weakness is now pushing EUR/USD back to the 1.1080 region, or fresh daily highs.
EUR/USD looks to risk-trends, data
The pair is trading on the positive territory for the first time after three consecutive daily pullbacks, managing at the same time to bounce off new 3-week lows in the vicinity of 1.1050.
In fact, the pair came under selling pressure after being once again rejected from recent tops in the 1.1170/80 band, always in response to the change of heart in the sentiment surrounding the buck and auspicious news on the US-China trade front.
Data wise in Euroland, German Industrial Production contracted 0.6% inter-month during September, showing the slowdown in the sector remains everything but abated. On a secondary role, Italian Retail Sales and Spanish 3y, 5y and 10y auctions are due. Across the pond, the only release today will be the usual weekly claims and the speech by FOMC’s R.Kaplan.
What to look for around EUR
The pair has come under extra selling pressure since the beginning of the week on the back of the renewed buying interest in the buck and the broad-based improvement in the sentiment around the riskier assets. In the meantime, the failure to break above October’s high near 1.1180 triggered a move lower to the 1.1050 region, or multi-week lows. In spite of occasional positive results in the euro docket, 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 0.09% at 1.1076 and faces the next up barrier at 1.1117 (100-day SMA) followed by 1.1179 (monthly high Oct.21) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the downside, a breakdown of 1.1054 (monthly low Nov.7) would target 1.1043 (55-day SMA) en route to 1.0925 (low Sep.3).