EUR/USD remains under pressure near 1.1300

• EUR/USD stays on the defensive around 1.1300.
• Risk-on trade picks up pace, USD remains bid.
• US 10-year yields rebound to new tops around 2.15%.

The shared currency remains so far unable to reverse the daily weakness, with EUR/USD challenging the critical support at the 1.1300 neighbourhood.

EUR/USD looks to risk trends

Following last week’s test of the 200-week SMA in the mid-1.1300s, the pair has now sparked a correction lower to the 1.1300/1.1290 band on the back of an improved sentiment in the riskier assets.

In fact, yields of the key US 10-year reference have started the week on a positive note and climbed as high as the 2.15% region earlier in the day, prompting the re-emergence of the selling bias in the Japanese yen and the consequent up move in USD/JPY.

Nothing worth mentioning event-wise in Euroland, while JOLTS Job Opening will be the only publication in the NA session later in the day.

What to look for around EUR

The ECB did not sounded as dovish as expected last Thursday despite revising slightly lower its forecasts for inflation and economic growth in the region for the next years and after members discussed restarting QE or event cutting rates at the meeting. So, rates are expected to remain at current levels at least through H1 2020, although the ECB convincing optimism on an eventual pick up in inflation figures and the economic activity appeared to remove some bearishness surrounding the shared currency for the time being. On the broader picture, the broad-based risk-appetite trends and USD-dynamics should dictate the sentiment surrounding the European currency for the time being, all in combination with developments from the trade front including the US, China, the EU and Mexico. On the political front, Italian politics is expected to remain a source of uncertainty and volatility, with the centre of the debate on the country’s opposition to EU fiscal rules.

EUR/USD levels to watch

At the moment, the pair is retreating 0.26% at 1.1302 and faces the next support at 1.1272 (100-day SMA) followed by 1.1215 (55-day SMA) and finally 1.1200 (low Jun.6). On the flip side, a breakout of 1.1347 (high Jun.7) would target 1.1367 (200-day SMA) en route to 1.1448 (monthly high Mar.20).