- EUR / USD is under pressure again above 1.20.
- Higher US yields offer support to the USD on Monday.
- The Eurozone Sentix Investor Confidence Index stood at -0.2 in February.
The pair EUR / USD seems to have found some resistance at the 1.2050 / 60 region Monday, staying within a narrow range at the beginning of the week. At the time of writing, the pair remains under pressure near 1.2030.
EUR / USD focuses attention on USD and risk sentiment
The resumption of bullish bias in the US dollar puts EUR / USD under additional downward pressure at the beginning of the week.
In fact, the persistent rise in U.S. bond yields it continues to drive the dollar rally and motivates the DXY US Dollar Index to regain some traction to the upside above the 91.00 level.
Regarding the euro data, the Eurozone Sentix Investor Confidence Index stood at -0.2 in February, coming in below expectations of 1.9 and falling from 1.3 the previous month. At the beginning of the session, the data showed that German industrial production was stable on a monthly basis during December. Later, the President of the ECB, Chritine Lagarde, will participate in a debate in the European Parliament.
No data releases on the other side of the Atlantic, though the focus is expected to be on inflation figures and Fed Chairman Powell’s speech on Wednesday and the preliminary index of consumer sentiment from the University of Michigan. Friday.
What can we expect around the EUR?
EUR / USD seems to have found decent support at the yearly lows around 1.1950 so far. Despite the recent downward correction, the outlook for the pair remains constructive in the long term, supported by prospects for a strong recovery in the region (and abroad), which in turn is underpinned by fiscal stimulus. added by the Fed and the ECB along with the hope of an acceleration in the launch of coronavirus vaccines. Furthermore, real interest rates continue to favor the euro area versus the US, which is also another factor supporting the common currency.
This week’s key events in the eurozone: Lagarde will speak on Monday and Wednesday. The German final CPI for January is published on Wednesday.
Eminent Background Topics: The appreciation of the EUR could trigger a verbal intervention by the ECB on inflation problems. The EU Recovery Fund. Italian politics. Large bullish positions in the speculative community.
EUR / USD levels
At the time of writing, the EUR / USD pair is shedding 0.17% on the day, trading at 1.2028. Immediate support is at 1.1952 (Feb 5 low), followed by 1.1887 (61.8% Fibonacci retracement of the Nov-Jan move) and 1.1694 (200-day SMA). On the other hand, a break above 1.2064 (38.2% Fibonacci retracement of the November-January move), would target 1.2119 (55-day SMA) en route to 1.2189 (January 22 high).