EUR/USD on road to recovery near 1.1060 ahead of Eurozone Sentix
- EUR/USD extends bounce amid broad USD retreat, weaker T-yields.
- Technical set up still favors the bears, with eyes on 1.1000 support.
- Immediate focus remains on Eurozone Sentix Investor Confidence data.
EUR/USD is looking to extend the overnight bounce in European trading, as the US dollar retreats across the board in tandem with the US Treasury yields.
Trade tensions continue to dent risk appetite
The spot picked up fresh bids over the last hour, as the renewed jitters on the US-China trade front combined with dismal Chinese trade data dampened the market mood.
Subsequently, the reduced demand for higher-yielding assets such as the Treasury yields dragged the US dollar broadly lower. The USD index corrects Friday’s upbeat US payrolls led upsurge to 97.84, now trading at session lows of 97.63, -0.15% on the day.
Despite the fresh leg higher, the pair risks falling back into the red zone, as the US dollar will likely remain buoyed by stronger US jobs data that pushed back the 2020 Fed rate cut expectations.
On the other hand, the European Central Bank (ECB) President Lagarde, at her first monetary policy meeting this Thursday, will likely signal at the ECB’s commitment to the recent stimulus package that included a rate cut and the restarting of quantitative easing (QE) program.
In the meantime, markets now await the Eurozone Sentix Investor Sentiment data to confirm if the recovery has legs. Meanwhile, the latest above-forecasts German Trade and Current Account data collaborate to the upbeat tone around the EUR.
EUR/USD Technical levels to watch