- EUR / USD loses control and falls back to daily lows.
- The dollar remains offered and pushes the DXY to new highs.
The single currency continues to be offered until now and is now dragging the EUR/USD to new daily lows in the region of 1.1870.
EUR / USD weaker to buy USD
EUR / USD fades from Thursday’s moderate pullback and is back on the downside of trading in response to renewed sentiment towards the dollar.
In fact, the dollar claims some of the ground lost in recent sessions after a significant rally in US yields, with the 10-year note approaching the 1.70% level after bottoming near 1.60% on Thursday.
On the agenda, industrial production figures in Germany, France and Spain disappointed expectations and showed signs of weakness during February. On the ECB’s side, Vice President De Guindos said earlier in the session that the economy performed poorly in the first quarter and warned against a premature withdrawal from the current stimulus program.
In the US data sphere, overall producer prices increased 1.0% month-on-month in March and 3.1% in the last twelve months. Core prices advanced 0.7% month-on-month and 4.2% compared to March 2020.
What to look for around EUR
EUR / USD finally managed to break above the 1.19 level and hit fresh 2-week highs around 1.1930, although the move lost some steam soon after. However, the short term outlook appears to have improved and it would not be surprising to see a sustainable advance further north of 1.1900 in the coming sessions. The pair’s recovery emerged with a new pessimistic sentiment in the dollar and growing hopes for a sustained recovery in the Old Continent now that the launch of the vaccine seems to have gained some momentum.
Technical levels
At the moment, the index is shedding 0.33% at 1.1872 and a breakout of 1.1704 (March 31 low) would target 1.1602 (November 4 monthly low) en route to 1.1570 (2008-2021 support line). On the other hand, the next obstacle is located at 1.1927 (weekly maximum of April 8) followed by 1.1989 (weekly maximum of March 11) and finally 1.2000 (psychological level).
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