EUR/USD trims gains, back around 1.14 ahead of U-Mich
Friday, 18 January 2019 · *The pair’s bull run faltered once again in the low-1.1400s.*
· *DXY clings to gains above 96.00 post-positive US data.*
· *US Industrial Production expanded more than expected in November.*
After an unsuccessful bullish attempt to the 1.1410 area, *EUR/USD* has now come under some selling pressure and it has returned to the 1.1400/1.1390 region.
*EUR/USD offered on US data*
The now better note around the buck is forcing the pair to shed further ground and drop to fresh daily lows near 1.1380, coincident with the key 55-day SMA.
The greenback picked up extra pace after Industrial Production expanded at a monthly 0.3% during November, surpassing initial estimates. Further auspicious data saw Manufacturing Production also expanding more than expected 1.1% MoM and Capacity Utilization ticking higher to 78.7% in December.
Later in the session, the preliminary gauge of US Consumer Sentiment for the month of January is also due.
*What to look for around EUR/USD*
Prospects of gains around EUR have been undermined by the dovish message from ECB’s Draghi earlier in the week pari passu with the continuation of the upside momentum in the buck. In the meantime, investors should remain focused on the ongoing slowdown in the euro area as well as upcoming issues such as the EU Parliamentary elections in May (populism could gain further presence), social unease in France (the ‘yellow-vest’ issue remains largely unresolved), omnipresence political effervescence in Italy and the likeliness that a technical recession in Germany in H2 2018.
*EUR/USD levels to watch*
At the moment, the pair is losing 0.07% at 1.1387 facing the next down barrier at 1.1370 (low Jan.17) seconded by 1.1356 (23.6% Fibo of the September-November drop) and finally 1.1306 (2019 low Jan.3). On the flip side, a breakout of 1.1422 (21-day SMA) would target 1.1442 (38.2% Fibo of the September-November drop) and finally 1.1465 (100-day SMA).