- EUR / USD regains composure and bounces off recent lows.
- No change in the German unemployment rate in March.
- Investor attention is expected to revolve around Biden’s speech.
The common coin smiles again and pushes the EUR / USD pair to the 1.1740-50 zone on Wednesday.
EUR / USD focuses attention on Biden and the data
The EUR / USD pair manages to reverse two consecutive daily declines and bounces off new 2021 lows just above the 1.17 round level.
The renewed selling bias around the dollar allows the pair to regain some ground lost in recent days and climb back up to the 1.1740 area, as market participants adjust for usual end-of-month / quarter cash flows.
Regarding the eurozone data, the German unemployment rate remained at 6.0% in February, while the change in unemployment fell by 8,000 in the same period. Later in the session, CPI inflation figures for the euro zone in general will also be released.
Across the Atlantic, all attention is expected to be on the Biden’s speech and his plan for another stimulus package that includes an investment of about $ 3 trillion in infrastructure, manufacturing and healthcare.
Turning to US data, ADP’s private sector employment report for March will be followed by the Chicago PMI, pending home sales and the EIA report.
What can we expect around the EUR?
EUR / USD finds decent support near the 1.1700 region so far this week. The sharp pullback in the pair came along with the persistent buying bias around the dollar, which has been weighing on the constructive view of the pair in recent weeks. The deterioration of morale in the eurozone, along with the slow pace of the vaccine launch in the region and the superior performance of the US economy compared to the other G-10 countries have been contributing to the renewed sales posture around to the common currency. However, the firm hand of the ECB (despite some verbal concerns) in combination with the expected rebound in economic activity in the region in the post-pandemic stage will likely prevent a much deeper pullback in the long-term pair.
Key events in the eurozone this week: Eurozone Preliminary CPI (Wednesday) – German Retail Sales, Eurozone Final PMI (Thursday).
Eminent Background Issues: Asymmetric economic recovery in the region. Sustainability of the rebound in inflation figures. Progress of the vaccine launch. Likely political turmoil around the EU Recovery Fund.
EUR / USD levels to watch out for
At the time of writing, the EUR / USD pair is gaining 0.22% on the day, trading at 1.1740. A breakout of 1.1864 (200-day SMA), would target 1.1989 (March 11 high) on its way to 1.2000 (psychological level). On the other hand, the next support is at 1.1704 (March 31 low), followed by 1.1602 (November 4 low) and finally 1.1572 (2008-2021 support line).
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