EUR/USD reverses the drop and returns to the 1.1100 area
- EUR/USD rebounds from 2-week lows near 1.1070.
- The Greenback corrects lower on Brexit, data.
- US Consumer Confidence disappointed in October.
After challenging 2-week lows in the 1.1070 region, EUR/USD has regained some buying attention and is now back to the 1.1100 area.
EUR/USD bounces off lows on USD-selling
Following the earlier move lower to the 1.1070 region, the pair is now looking to add to Monday’s gains near the key barrier at 1.1100 the figure on the back of renewed optimism on the Brexit front and weakness surrounding the buck.
In fact, the risk-associated space has regained the smile earlier today after UK’s Labour Party said it will back elections in December ahead of the parliamentary vote due later today.
Adding to the pair’s upside, the Greenback is now suffering the poor prints from US Consumer Confidence tracked by the Conference Board, receding to 125.0 for the current month.
Still on the buck (and on the poor-data-side), house prices measured by the S&P/Case-Shiller Index rose at a non-seasonally-adjusted 2.0% YoY in August, missing forecasts. On a brighter side, Pending Home Sales rose at a monthly 1.5% during September.
What to look for around EUR
EUR looks unable to return to the area above the 1.1100 mark so far this week, which could spark some near term consolidation ahead of a potential resumption of the downside. Despite the October rally in spot has been exclusively sponsored by weakness in the Dollar, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh on EUR in the short/medium term horizon.
EUR/USD levels to watch
At the moment, the pair is gaining 0.02% at 1.1102 and faces the next up barrier at 1.1126 (100-day SMA) seconded by 1.1171 (monthly high Oct.18) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the downside, a breakdown of 1.1072 (low Oct.25) would target 1.1040 (55-day SMA) en route to 1.0925 (low Sep.3).