EUR/USD remains on the defensive near 1.1050
The selling bias still prevails around the European currency, with EUR/USD hovering around 1.1050 at the end of the week. EUR/USD extends the bearish note in the second half of the week on the back of the resumption of the demand for the greenback and unabated jitters surrounding the war in Ukraine. Indeed, the bid bias in the dollar has been recently reignited following another failed attempt to advance on a negotiated solution to the Russia-Ukraine conflict, which has in turn forced the spot to abandon the area of tops in the 1.1180/85 band (March 31). The move lower in the pair comes in tandem with the continuation of the decline in the German 10y bund yields, down for the second straight session around the 0.57% area.
In the domestic docket, flash figures showed the CPI in the broader Euroland is expected to have risen 7.5% in the year to March and 3.0% when it comes to the Core CPI. Earlier in the session, the final Manufacturing PMI came at 56.9 and 56.5 in Germany and the EMU, respectively, for the month of March. EUR/USD extends recent losses and retests the 1.1050 zones in response to further improvement in the mood around the buck. As usual, pockets of strength in the single currency should appear reinforced by the speculation of the start of the hiking cycle by the ECB at some point by year-end, 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. So far, the spot is losing 0.17% at 1.1047 and faces the next up barrier at 1.1184 (weekly high March 31) followed by 1.1187 (55-day SMA) and finally 1.1243 (100-day SMA). On the other hand, 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).