EUR/USD remains under pressure, challenges lows near 1.0960

• EUR/USD alternates gains with losses around 1.0960.
• Germany final Services PMI came at 56.1 in March.
• US ISM Non-Manufacturing, Fedspeak next of note later.

EUR/USD remains unable to gather some serious upside traction and looks depressed around 1.0960 on Tuesday.

EUR/USD gives away initial gains, dollar rebounds

EUR/USD appears to have met some decent contention near 1.0960 so far this week amidst the intense bid bias in the greenback, although the price action in both currencies seems to be facing some rising cautiousness against the backdrop of increasing uncertainty in the geopolitical scenario.

On the latter, the EcoFin meeting is due today and is expected to focus on potential extra sanctions against Moscow as well as on the thorny energy sector.

Further out, the German debt market shows some recovery in the 10y bund yields, which manage to regain the 0.55% region amidst some fresh bond selling.

In the domestic calendar, final Services PMIs in Germany and the broader Euroland came at 56.1 and 55.6, respectively, for the month of March. In the NA session, the focus of attention will be on the ISM Non- Manufacturing and the final Services PMI during last month along with speeches by FOMC’s Brainard, Williams and Kashkari.

What to look for around EUR

EUR/USD remains under pressure and revisits the 1.0960 region so far this week. The recent negative performance of the pair came in response to the firmer pace of the greenback and renewed geopolitical concerns. As usual, pockets of strength in the single currency should appear reinforced by speculation the ECB could raise rates before the end of the year, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a rebound in the euro.

Key events in the euro area this week: Germany, EMU Final Services PMIs, EcoFin Meeting (Tuesday) – Germany Construction PMI (Wednesday) – EMU Retail Sales, ECB Accounts (Thursday) – France Presidential Election (Sunday, April 10).

Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the euro area. Speculation of ECB tightening/tapering later in the year. Presidential elections in France in April. Impact of the geopolitical conflict in Ukraine.

EUR/USD levels to watch

So far, spot is losing 0.02% at 1.0967 and a drop below 1.0944 (weekly low March 28) would target 1.0900 (weekly low March 14) en route to 1.0805 (2022 low March 7). The next up barrier emerges at 1.1184 (weekly high March 31) followed by 1.1236 (100-day SMA) and finally 1.1395 (weekly high February 16).