EUR/USD parked around 1.2300, focus on risk trends

• The pair keeps orbiting around the 1.2300 handle so far this week.
• USD looking to stabilize near 89.60 after Monday’s pullback.
• US Producer Prices only release of note later today.

The single currency is now struggling for direction after a promising start of the week, with EUR/USD now shedding some ground after testing tops in the 1.2330 region on Monday.

EUR/USD attention to risk appetite

After two consecutive daily advances, the pair is now struggling for direction amidst some tepid recovery in the greenback.

The pick up in the risk aversion yesterday forced the buck to gave up gains and recede below the psychological 90.00 milestone, in turn pushing spot to fresh tops in the 1.2320/30 band.

However, the sentiment in the risk-associated universe appears somewhat relieved today following the conciliatory tone from China’s Xi Jinping at his speech earlier in the day, where he pledged to open some extra sectors in the economy.

In the data space, the only release of note will be US Producer Prices for the month of March.

EUR/USD levels to watch

At the moment, the pair is retreating 0.06% at 1.2311 facing immediate contention at 1.2294 (10-day sma) seconded by 1.2214 (low Apr.6) and finally 1.2206 (low Feb.9). On the other hand, a break above 1.2340 (21-day sma) would target 1.2346 (high Apr.2) en route to 1.2478 (high Mar.27).