EUR/USD regains upside impulse and retargets 1.1000

• EUR/USD so far reverses Wednesday’s losses and retests 1.0980.
• The ECB will publish its Accounts of the last monetary policy meeting.
• US Initial Claims, Philly Fed index next of note later in the NA session.

Buyers return to the single currency and push EUR/USD back to the 1.0980 region on Thursday.

EUR/USD focuses on ECB, data

In line with the rest of the FX universe, EUR/USD maintains the weekly choppy performance well in place on Thursday, with gains limited by the psychological 1.1000 neighbourhood for the time being.

In the meantime, the absence of strong drivers for the price action on both sides of the ocean leaves the attention to the potential next steps from both the ECB and the Fed regarding the ongoing normalization of the monetary conditions. On this, investors see both central banks hiking interest rates by 25 bps at their meetings in May.

Data wise in the region, the ECB will release its Accounts of the March gathering, while the EMU Balance of Trade results and the flash Consumer Confidence are also due later in the session.

In the US, usual weekly Claims are next on tap seconded by the Philly Fed Manufacturing Index.

 What to look for around EUR

EUR/USD keeps the range bound trade well in place and always below the 1.1000 region so far on Thursday.

Meanwhile, price action around the single currency should continue to closely follow dollar dynamics, as well as the incipient Fed-ECB divergence when it comes to the banks’ intentions regarding the potential next moves in interest rates.

Moving forward, hawkish ECB-speak continue to favour further rate hikes, although this view appears in contrast to some loss of momentum in economic fundamentals in the region.

Key events in the euro area this week: ECB Accounts, EMU Flash Consumer Confidence (Thursday) – Advanced Manufacturing/Services PMIs (Friday).

Eminent issues on the back boiler: Continuation (or not) of the ECB hiking cycle. Impact of the Russia-Ukraine war on the growth prospects and inflation outlook in the region. Risks of inflation becoming entrenched.

EUR/USD levels to watch

So far, the pair is gaining 0.7% at 1.0972 and a break above 1.1075 (2023 high April 14) would target 1.1100 (round level) en route to 1.1184 (weekly high March 21 2022). On the opposite hand, there is initial support at 1.0831 (monthly low April 10) seconded by 1.0788 (monthly low April 3) and finally 1.0757 (55-day SMA).