EUR/USD adds to gains above the 1.1300 handle

• The pair moves higher and looks to consolidate above 1.1300.
• The greenback stays on the defensive near 96.80.
• Markets keep looking to trade for direction.

After bottoming out in the mid-1.1200s, or fresh 2019 lows on Friday, EUR/USD has managed to gather some pace and regain the 1.1300 handle and above at the beginning of the week.

EUR/USD firmer, looks to trade

Rising optimism over further progress at the upcoming US-China trade talks in Washington later in the week keeps supporting the upbeat tone in the risk-associated space and sustains the ongoing rebound in the pair.

With US markets closed due to the President’s day holiday, market participants will look to developments from the trade front for near term direction ahead of key releases in both sides of the Atlantic, including FOMC and ECB minutes on Wednesday and Thursday, respectively.

What to look for around EUR

US-China trade talks will be in centre stage this week and are expected to sustain the improved mood in the riskier assets, as markets are looking at the possibility that both parties could clinch a deal sooner than later. On another direction, EUR should closely follow comments from ECB members regarding the ongoing slowdown in the euro bloc and potential guidance from the ECB in the next months, at a time when speculations that the central bank could refrain from acting on rates this year remain on the rise.

EUR/USD levels to watch

At the moment, the pair is gaining 0.16% at 1.1309 facing the next hurdle at 1.1325 (high Feb.18) seconded by 1.1356 (23.6% Fibo of the September-November drop) and then 1.1403 (100-day SMA). On the other hand, a break below 1.1248 (2019 low Feb.14) would target 1.1215 (2018 low Nov.12) en route to 1.1118 (monthly low Jun.20 2017).