EUR/USD bounces off yearly lows near 1.0780 ahead of ECB

• EUR/USD stays under pressure below the 1.0800 mark.
• German Producer Prices rose 0.8% MoM during last month.
• ECB Accounts coming up next ahead of US Philly Fed index.

EUR/USD remains depressed in the second half of the week and keeps trading in the area of fresh yearly lows in sub-1.0800 levels.

EUR/USD offered on USD-buying

EUR/USD has quickly left behind Wednesday’s positive session and it has resumed the downside on Thursday, dropping further and printing new YTD lows in the vicinity of 1.0770 always on the back of the unremitting upside pressure in the greenback.

In fact, the dollar keeps the bid bias unchallenged so far, pushing the US Dollar Index (DXY) to fresh peaks near 99.80 against the backdrop of positive headlines from the Chinese coronavirus and increasing selling pressure hitting the yen on speculations that the Japanese economy could slip back into recession in the next periods.

Data wise in Germany, Producer Prices rose more than expected during January: 0.8% inter-month and 0.2% from a year earlier. In addition, the GfK’s Consumer Climate eased a tad to 9.8 for the month of March (from 9.9). Later in the European morning, the ECB will publish its minutes (Accounts) from the latest meeting.

Across the pond, the usual weekly report on the US labour market is due seconded by the Philly Fed manufacturing gauge for the current month.

What to look for around EUR

There is no respite for the decline in EUR/USD so far this week, which it recorded fresh 2020 lows in the 1.0780/75 band earlier in the session. As usual, USD-dynamics are expected to keep ruling the pair’s price action for the time being along with the broader risk appetite trends, where the COVID-19 remains in centre stage. On another front, the ECB is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change in the monetary policy before that time pretty flat. Further out, latest results from the German and EMU dockets continue to support the view that any attempt of recovery in the region remains elusive for the time being and is expected to keep weighing on the currency.

EUR/USD levels to watch

At the moment, the pair is losing 0.09% at 1.0794 and a breakdown of 1.0777 (weekly/2020 low Feb.20) would target 1.0710 (monthly low Jan.5 2016) en route to 1.0569 (monthly low Apr.10 2017). On the flip side, the next up barrier is located at 1.0879 (2019 low Oct.1) seconded by 1.0892 (23.6% Fibo of the 2020 drop) and finally 1.0981 (monthly low Nov.29 2019).