EUR/USD challenges 1.1000 post-US GDP figures

• EUR/USD recedes to the vicinity of the key 1.1000 mark.
• EMU Consumer Confidence came in at -17.5 in April.
• US Flash GDP disappointed expectations in Q1.

EUR/USD fades the initial upbeat mood and retreats to the boundaries of 1.1000 the figure on the back of the marked bounce in the Greenback on Thursday.

EUR/USD weaker on USD-buying

EUR/USD now looks offered in the low-1.1000s against the backdrop of the strong bout of strength in the Dollar and the continuation of the march north in US yields across the curve.

The move lower in the pair came soon after advanced US GDP Growth Rate saw the economy expand less than estimated by 1.1% YoY and 4.0% inter-quarter in the January-March period. In addition, Initial Claims rose by 230K in the week to April 22.

Earlier in the session, the Consumer Confidence measured by the European Commission in the broader Euroland matched the preliminary reading at -17.5 in April.

What to look for around EUR

EUR/USD comes under pressure and threatens to breach the key 1.1000 support 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: Final Consumer Confidence, Economic Sentiment (Thursday) – 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 0.25% at 1.1010 and faces the initial 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 other hand, the breakout of 1.1075 (2023 high April 14) would target 1.1100 (round level) en route to 1.1184 (weekly high March 21 2022).