- The pair now comes under extra pressure and tests lows near 1.2380.
- The greenback faces a pick up in its demand, with DXY testing 89.70/75.
- ECB meeting, Trump’s presser, US payrolls next of relevance.
The demand for the shared currency appears mitigated during the European morning, motivating EUR/USD to grind lower to the 1.2385/80 band, or daily lows.
EUR/USD focused on ECB
Spot is adding to yesterday’s marginal losses following a doji-like candle and another failure at the key resistance level in the 1.2430 region, where sits the short-term resistance line off YTD lows seen in January.
EUR seems to have met some sellers after Italian former PM Silvio Berlusconi said he would clinch a deal with Mateo Salvini’s Lega Nord, the euro-skeptic party, in order to form a coalition government in Italy following the inconclusive results at the elections over the weekend.
Still in Euroland, the ECB is expected to key rates on hold today, although market consensus sees the central bank dropping the easing bias – something that some members already favoured at the January meeting. However, the lack of upside traction evidenced in inflation in the region could prevent the Council from making any further decisions on any issue regarding the exit of the current QE programme.
In the data space, German Factory Orders contracted 3.9% MoM in January while the usual weekly report on US labour market and Challenger Job Cuts are only due across the pond.
EUR/USD levels to watch
At the moment, the pair is losing 0.26% at 1.2379 and a break below 1.2333 (21-day sma) would target 1.2315 (10-day sma) en route to 1.2272 (low Mar.1). On the flip side, the immediate resistance aligns at 1.2445 (high Mar.7) seconded by 1.2537 (high Jan.25) and then 1.2557 (2018 high Feb.18).
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