EUR/USD clings to daily gains near 1.0840

• EUR/USD off highs, stays close to the 1.0840 region.
• Inactivity in the US markets bolsters the current consolidation.
• German, EMU ZEW Survey next of relevance on Tuesday.

After climbing as high as the 1.0850 region during early trade, EUR/USD met some selling pressure and it has now receded to the 1.0840/35 band, always amidst the prevailing consolidative mood in the global markets.

EUR/USD looks to risk trends

After three consecutive daily pullbacks – including fresh YTD lows in the 1.0830/25 band - the pair seems to have regained some buying interest against the backdrop of the generalized consolidative mood among investors, mainly due to the inactivity in the US markets due to the Washington’s Birthday holiday.

In the meantime, concerns around the COVID-19 look somewhat contained and keep propping up the upbeat sentiment surrounding the riskier assets on Monday.

Later in the week, the single currency should be under scrutiny as the German/EMU ZEW survey is due on Tuesday, seconded by the ECB Accounts on Thursday and key flash Manufacturing/Services PMIs in the core Euroland.

What to look for around EUR

The pair has so far managed to bounce off YTD lows around 1.0830 on Friday, although the bearish mood surrounding the European currency remains far from abated. In the meantime, USD-dynamics are expected to dictate the pair’s price action for the time being along with the broad risk trends, where the COVID-19 is still in the centre of the debate. On another front, the ECB is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change in the monetary policy before that time pretty flat. Further out, latest results from the German and EMU dockets continue to support the view that any attempt of recovery in the region remains elusive for the time being and is expected to keep weighing on the currency.

EUR/USD levels to watch

At the moment, the pair is advancing 0.08% at 1.0838 and faces the initial hurdle at 1.0957 (weekly high Feb.10) seconded by 1.0988 (21-day SMA) and finally 1.1069 (55-day SMA). On the downside, a breach of 1.0827 (weekly/2020 low Feb.14) would target 1.0814 (78.6% Fibo of the 2017-2018 rally) en route to 1.0569 (monthly low Apr.10 2017).