- The pair extends the sideline theme in the mid-1.1300s.
- German GfK climate gauge came in unchanged in March.
- Attention remains on Powell’s testimony later in the day.
EUR/USD is extending the consolidative theme in the upper end of the current range around 1.1350 amidst thin trade conditions and scarce volatility.
EUR/USD now looks to Powell
Further upside in spot has been so far capped by the key 55-day SMA in the 1.1380 area, while the 1.1350/60 band represents the ongoing congestion area, where converges the 21-day SMA and a Fibo retracement.
As usual, the exclusive driver behind the better mood in the riskier assets remains the rising optimism on the US-Sino trade negotiations, all in response to the recent progress made in Beijing and Washington. In this regard, President Trump and China’s Xi Jinping are expected to meet once again in March.
In the data space, German Consumer Climate remained unchanged at 10.8 for the month of March. Moving forward, all the attention will be on the testimony by Chief Powell before the Senate Banking Panel, where a dovish tone is largely anticipated by market participants.
What to look for around EUR
The European currency continues to look to developments from the US-China trade talks for near term direction, while the effervescence on the US-EU trade front appear somewhat relegated so far. Recent poor prints from the euro docket and a ‘reality check’ from the ECB minutes appear to have exacerbated concerns over the deterioration in the bloc’s fundamentals and casted further shadows over the probability of any action on rates from the ECB later this year.
EUR/USD levels to watch
At the moment, the pair is losing 0.03% at 1.1353 facing the next up barrier at 1.1371 (high Feb.20) seconded by 1.1381 (55-day SMA) and then 1.1391 (100-day SMA). On the other hand, a break below 1.1320 (10-day SMA) would target 1.1275 (low Feb.19) en route to 1.1234 (2019 low Feb.15).