EUR/USD up smalls around 1.1370, focus on trade

• The pair remains sidelined below the 1.1400 handle.
• Improved risk-on mood bolsters the sentiment.
• EMU Sentix index, Producer Prices coming up next.

EUR/USD is now prolonging the consolidative note that has been in place for the past sessions in response to last week’s failure in levels above 1.1400 the figure.

EUR/USD looks to trade, data

The pair remains unable to break above the critical barrier at 1.1400 the figure in spite of the better mood surrounding the riskier assets, always on the back of the apparent proximity of a trade deal between the US and China.

Also supporting the pair somewhat, President Trump has renewed his criticism of the Fed’s ongoing QT over the weekend, adding that the greenback is ‘too strong’ according to newspaper WSJ.

Data wise in Euroland, Investors’ Confidence gauged by the Sentix index is due later along with January’s Producer Prices. Across the ocean, there is nothing of relevance in the calendar ahead of tomorrow’s ISM Non-manufacturing.

What to look for around EUR

In line with the broader risk-associated complex, the shared currency continues to look to developments from the US-China trade negotiations for near term direction. Looking at the broader picture, the ECB is expected to remain in ‘pause mode’ for the foreseeable future amidst the ongoing slowdown in the region, while investors have practically priced out any up move in rates this year. In addition, political headwinds are seen arising in light of the upcoming EU parliamentary elections, where the focus of attention could be on the probable increased presence of populism.

EUR/USD levels to watch

At the moment, the pair is up 0.03% at 1.1365 and a break above 1.1419 (high Feb.28) would target 1.1442 (38.2% Fibo of the September-November drop) en route to 1.1506 (200-day SMA). On the downside, immediate contention emerges at 1.1341 (21-day SMA) seconded by 1.1336 (200-week SMA) and finally 1.1275 (low Feb.19).