EUR/USD consolidates losses below the 1.1400 mark.
Dollar, yields rebound on better mood in the risk universe.
EMU Q4 GDP figures next of relevance in the docket.
EUR/USD has broken below the 1.1400 support on Tuesday in response to the significant improvement in the risk-associated universe.
EUR/USD recedes from 2020 tops near 1.1500
After printing fresh yearly highs just pips away from 1.15 the figure at the beginning of the week, EUR/USD has come under renewed downside pressure amidst a noticeable rebound in the greenback along with the riskier assets.
Indeed, US yields manage to rebound from recent all-time lows and are lending extra wings to the greenback, which is in turn sponsoring the bounce in the US Dollar Index (DXY) off Monday’s multi-month lows.
The better mood in the risk complex came after President Trump said on Monday the US is considering some tax relief measures in order to alleviate the negative effects of the coronavirus on the economy. In the same line, Japan has also announced a stimulus package, which is helping to mitigate the sharp pick-up in the demand for the safe haven yen (and thus boosting USD/JPY back above the 104.00 mark).
Data wise in Euroland, another revision of Q4 GDP figures is due later along with quarterly employment figures. Across the pond, the only release will be the NFIB index later in the NA session.
What to look for around EUR
EUR/USD has quickly left behind the key barrier at 1.1400 the figure and advanced to new yearly highs near 1.1500 on Monday. In spite of the ongoing knee-jerk, the positive outlook around the euro remains sustained by USD-weakness amidst COVID-19 panic, shrinking US yields and the tangible probability of another interest rate cut by the Fed later in the month. Investors’ attention, in the meantime, should shift to the ECB event on Thursday. The central bank is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change in the monetary policy before that time pretty flat. This view, however, appears somewhat challenging in light of the ongoing concerns around the coronavirus and following recent moves by major central banks. On another front, recent better-than-expected results in both Germany and the broader Euroland appear to have re-ignited some optimism among investors regarding the possibility of some recovery in the region and the currency. This view is also supported by latest news of fiscal stimulus in Germany.
EUR/USD levels to watch
At the moment, the pair is losing 0.69% at 1.1358 and faces the next support at 1.1332 (weekly low Mar.10) seconded by 1.1239 (monthly high Dec.31 2019) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the upside, a break above 1.1495 (2020 high Mar.9) would target 1.1514 (high Jan.31 2019) en route to 1.1569 (2019 high Jan.10).
Source from https://www.fxstreet.com/news/eur-usd-cuts-some-losses-still-below-11400-ahead-of-data-202003100907