EUR/USD under pressure near 1.1100 post-US data

• EUR/USD comes under pressure and test the 1.1100 area.
• US GDP surprised to the upside in Q3.
• German flash CPI matched expectations in October.

The European currency has given away its earlier gains vs. the Greenback and is now dragging EUR/USD to the vicity of the 1.1100 handle, turning negative for the day.

EUR/USD weaker ahead of FOMC

After probing fresh weekly peaks in the boundaries of 1.1130, the pair came under renewed a quite moderate downside pressure on the back of better-than-expected US Q3 GDP figures, showing the economy is seen expanding at an annualized 1.9%, bettering forecasts. Earlier in the day, the ADP report also surprised to the upside, noting the US private sector added more jobs than initially estimated.

EUR is also deriving further selling impetus from the lack of traction in German inflation for the current month, as showed by advanced CPI figures. Indeed, German consumer prices are expected to rise 0.1% inter-month and 1.1% over the last twelve months.

Later in the session, the FOMC is expected to deliver another 25 bps ‘insurance’ cut, although the focus of attention will be on Powell’s press conference and any changes on the Fed’s forward guidance.

What to look for around EUR

EUR has so far managed to return to the area above the 1.1100 mark so far this week, re-shifting its target to monthly tops near 1.1180. Despite the October rally in spot has been exclusively sponsored by weakness in the Dollar, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh on EUR in the short/medium term horizon.

EUR/USD levels to watch

At the moment, the pair is losing 0.02% at 1.1109 and , a breakdown of 1.1072 (low Oct.25) would target 1.1040 (55-day SMA) en route to 1.0925 (low Sep.3). On the other hand, the next hurdle lines up at 1.1124 (100-day SMA) seconded by 1.1171 (monthly high Oct.18) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally).