EUR/USD bounces off lows and retakes 1.1000

• EUR/USD meets support near 1.0960 on Friday.
• Disappointing EMU, GDP results weigh on the single currency.
• US headline PCE eased more than expected in April.

After bottoming out in the proximity of 1.0960, EUR/USD manages to regain some composure and now looks to regain the key 1.1000 barrier and beyond at the end of the week.

EUR/USD offered on poor euro docket

A fresh bout of oxygen seems to lift EUR/USD back to the 1.1000 neighbourhood, as the Greenback gives aways some gains and investors continue to digest disappointing results from the EMU and German docket on Friday.

The US dollar, in the meantime, recedes from earlier tops in response to another sign of further disinflation in the US economy following the publication of PCE prints for the month of March.

In the meantime, yields on both sides of the Atlantic fade Thursday’s rebound and refocus on the downside amidst an incipient recovery in the risk complex.

Later in the session, the final prints from the Michigan Consumer Sentiment will close the weekly calendar.

What to look for around EUR

EUR/USD’s upside momentum loses traction on the back of disheartening prints from the euro calendar on Friday.

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: Euro group Meeting, Germany labour market report/ Advanced Inflation Rate/Flash Q1 GDP Growth Rate, EMU Flash Q1 GDP Growth Rate (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 losing 0.28% at 1.0997 and faces the next support at 1.0909 (weekly low April 17) seconded by 1.0831 (monthly low April 10) and finally 1.0788 (monthly low April 3). On the flip side, the surpass of 1.1075 (2023 high April 14) would target 1.1100 (round level) en route to 1.1184 (weekly high March 21 2022).