EUR/USD meets further selling pressure and drops to 1.1420 ahead of Draghi

• The better tone in the greenback drags spot to the 1.1420 region.
• DXY advances to fresh weekly tops just below the 96.00 handle.
• ECB’s Draghi, Brexit, US data to drive sentiment today.

The buying interest around the greenback is now forcing EUR/USD to recede to fresh weekly lows in the boundaries of the 1.1420 region.

EUR/USD looks to Draghi, Brexit

Spot drops to new multi-day lows in the 1.1420 area on Tuesday amidst a moderate pick up in the demand for the greenback and the subsequent move higher in the US Dollar Index to the vicinity of 96.00 the figure.

In the meantime, markets’ attention continues to look to the crucial vote on UK PM Theresa May’s Brexit deal at the House of Commons, expected later in the evening/night in Europe. So far, consensus points to a defeat of May’s deal although the difference in votes is now cited as key for future negotiations (and the price action in the Sterling).

Data wise in Euroland, final December CPI figures in France and Spain came in in line with preliminary readings, while the trade surplus in the region widened to €19.0 billion.

What to look for around EUR/USD

All the looks will be upon the Brexit vote later today and its impact on the broad risk appetite trends. Previously, investors would closely follow Draghi’s speech for any clues on the apparent slowdown in some fundamentals in the region and the implications (if any) on the bank’s monetary stance. In the medium/longer term, US-China trade dispute should remain a key driver for the sentiment in the global markets. Further out, Italian politics, the French budget, EU Parliamentary elections and the evident slowdown in German fundamentals in H2 2018 could undermine further bullish attempts in EUR.

EUR/USD levels to watch

At the moment, the pair is retreating 0.30% at 1.1443 facing immediate contention at 1.1423 (low Jan.15) seconded by 1.1417 (21-day SMA) and then 1.1380 (55-day SMA). On the upside, a break above 1.1569 (2019 high Jan.10) would open the door to 1.1585 (61.8% Fibo of the September-November drop) and finally 1.1621 (high Oct.16 2018).