- EUR / USD reverses gains and falls below 1.1900.
- German / EMU economic sentiment beat expectations in March.
- US advanced retail sales contracted 3.0% in February.
The EUR/USD Initial optimism quickly fades and falls to fresh multi-day lows in the region below 1.19 at the trend reversal on Tuesday.
EUR / USD weakened against USD strength
EUR / USD is now trading defensively for the third consecutive session after briefly testing session highs in the 1.1950 region.
The sudden downward move in the pair comes amid a bout of strength in the dollar despite US yields remaining in a consolidation mood so far on Tuesday.
The favorable results of the ZEW survey showed that economic sentiment in both Germany and the euro area improved further in March, although these results provided short-lived support for the single currency.
In the US data sphere, advanced retail sales for February disappointed market participants after contracting to 3.0% monthly. Core sales followed suit and also fell 2.7% from the previous month.
What to look for around EUR
EUR / USD encountered strong resistance near the 1.20 psychological hurdle in recent sessions. The strong and persistent stance of the dollar in recent weeks has put the previous constructive view on the euro under scrutiny as market participants continue to adjust to higher US returns and the superior performance of the US economy narrative. . However, the ECB’s steady hand (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 pair.
Technical levels
At the moment, the index is losing 0.14% at 1.1908 and faces the next support at 1.1897 (March 16 weekly low) seconded by 1.1835 (March 9, 2021 low) and finally 1.1762 (78.6% Fibonacci from November rally. to January). On the upside, a break above 1.1989 (March 11 weekly high) would target 1.2084 (50 SMA) on its way to 1.2113 (March 3 monthly high).
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