EUR/USD extends the rangebund trading below 1.1400, focus on Trump

• EUR/USD remains offered below the 1.1400 mark on Tuesday.
• EMU Q4 GDP came in at 1.0% YoY and 0.1% QoQ.
• Attention now shifted to Trump’s speech later in the evening.

The selling bias remains well and sound around the European currency on Tuesday, with EUR/USD extending the consolidation below the 1.1400 level.

EUR/USD offered ahead of Trump

After three consecutive daily pullbacks, EUR/USD is now facing some selling pressure in response to the rebound in the demand for the buck, rising US yields and extreme overbought levels in the pair.

In fact, the riskier assets have improved markedly on Tuesday after news cited the US could announce some sort of fiscal measures in order to counteract the coronavirus impact. By the same token, the mood in the global markets was also boosted after Japan said it will deliver an stimulus package with the same destination.

In the docket, another revision of Q4 GDP figures in the broader euro area showed the economy is seen expanding at an annualized 1.0% and 0.1% inter-quarter, failing to surprise markets.

Across the Atlantic, the NFIB index came in in line with forecasts at 104.5 during last month, a tad above January’s reading.

Later in the European evening/night, President Trump will deliver a speech with a potential stimulus package on top of investors’ expectations.

What to look for around EUR

EUR/USD has quickly left behind the key barrier at 1.1400 the figure and advanced to new yearly highs near 1.1500 on Monday. In spite of the ongoing knee-jerk, the positive outlook around the euro remains sustained by USD-weakness amidst COVID-19 panic, shrinking US yields and the tangible probability of another interest rate cut by the Fed later in the month. Investors’ attention, in the meantime, should shift to the ECB event on Thursday. The central bank is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change in the monetary policy before that time pretty flat. This view, however, could be put to the test in light of the ongoing concerns around the coronavirus and following recent moves by major central banks. On another front, recent better-than-expected results in both Germany and the broader Euroland appear to have re-ignited some optimism among investors regarding the possibility of some recovery in the region and the currency. This view is also supported by latest news of fiscal stimulus in Germany.

EUR/USD levels to watch

At the moment, the pair is losing 0.62% at 1.1366 and faces the next support at 1.1332 (weekly low Mar.10) seconded by 1.1239 (monthly high Dec.31 2019) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the upside, a break above 1.1495 (2020 high Mar.9) would target 1.1514 (high Jan.31 2019) en route to 1.1569 (2019 high Jan.10).