EUR/USD: Vulnerable below 1.0670, eyes on EZ CPI

The EUR/USD pair traded flat-lined almost through-out the Asian session, and now extends its side-trend near 11-day troughs into early Europe, as markets await fresh impetus from the upcoming macro data from both continents due later today.

The spot remains under pressure for the fourth straight session, mainly driven by broad Euro weakness amid reports that ECB’s message from the March meeting was over interpreted by markets,  as ECB remains in no hurry to raise rates or resort to tapering this year.

Amidst diminishing hopes of an end to ECB’s stimulus, divergence between the Fed’s and ECB’s monetary policy outlooks becomes more prominent, boosting the buck at the expense of the common currency.

More so, upbeat US fundamentals continue to bolster Fed rate hike bets, adding to the weakness in EUR/USD. The immediate focus now remains on the German retail sales and jobs data, which will be followed by Eurozone flash CPI data. Meanwhile, the US dataflow combined with Fedspeaks will also hog the limelight today.

EUR/USD Technical Levels   

Karen Jones, Analyst at Commerzbank explains, “EUR/USD’s near term outlook is more negative: The cross continues to sell off following the recent failure at the 1.0871 200 day moving average. It has reached the 55 day ma at 1.0674 and failure here will target the base of the short term channel at 1.0575. Intraday rallies are indicated to now remain capped by 1.0730.”