EUR/USD looks to extend the rebound around 1.1230

• The pair stays sidelined around the 1.1230 region so far.
• German Retail Sales, Unemployment Rate coming up next.
• US PCE, Personal Spending, U-Mich expected later in the day.

Friday is bringing some respite for the single currency so far, with EUR/USDnow navigating within a narrow range near 1.1230 and posting decent gains for the time being.

EUR/USD looks to data, sentiment

After three consecutive daily pullbacks, the pair has managed to regain some composure and is now rebounding from yesterday’s multi-day lows in the 1.1215/10 band.

Souring risk-on trade plus disappointing flash inflation figures in Germany lent wings to the greenback in past sessions, which managed to push the US Dollar Index beyond the key 97.00 the figure and clinch at the same time fresh 2-week highs.

Moving forward, German Retail Sales are due next seconded by the jobs report, while advanced inflation figures in Euroland will grab all the attention later in the session.

Across the pond, PCE, Personal Income/Spending, the Chicago PMI and final Consumer Sentiment are all expected later in the NA trading hours.

What to look for around EUR

Market participants have left behind the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends, USD-dynamics and domestic data. Regarding the latter, and looking to the broader picture, the view of a slowdown in the bloc has been ‘confirmed’ last week following disappointing advanced PMIs in core Euroland, while yesterday’s poor German flash CPI also collaborated with the mood. This, in turn, should add to the idea of a ‘patient for longer’ stance from the ECB. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.

EUR/USD levels to watch

At the moment, the pair is gaining 0.13% and a break above 1.1298 (21-day SMA) would target 1.1357 (100-day SMA) en route to 1.1448 (high Mar.20). On the downside, the next support lines up at 1.1233 facing immediate contention at 1.1213 (low Mar.28) seconded by 1.1176 (low Mar.7) and finally 1.1118 (monthly low Jun.20 2017).

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