EUR/USD continues to move sideways below 1.0850 as markets turn quiet
- Bundesbank sees German economic growth remaining weak in Q1.
- US Dollar Index looks to close flat above 99.
- ZEW Survey's Economic Sentiment for eurozone is expected to improve in February.
After posting its lowest weekly close since April of 2017 at 1.0832 last Friday, the EUR/USD is having a difficult time staging a meaningful recovery on Monday as the thin trading conditions force the pair to remain stuck in a tight 20-pip range. As of writing, the pair was up 0.09% on a daily basis at 1.0840.
Earlier in the day, Germany's central bank, Bundesbank, in its monthly report said the economic growth in Germany was expected to remain weak in the first quarter of 2020 amid weak exports and the coronavirus outbreak in China. Nevertheless, these remarks failed to trigger a market reaction.
Focus shifts to ZEW Survey
On Tuesday, the ZEW Survey for Germany and the eurozone will be looked upon for fresh catalysts. Analysts see the Economic Sentiment for the eurozone to improve to 30 in February from 25.6 in January but expect the same reading in Germany to drop to 20.4 from 26.7. An upbeat reading from Germany could help the shared currency start recovering its losses against the buck.
In the meantime, the US Dollar Index is staying flat on the day near 99.10 in the absence of significant macroeconomic drivers. The US financial markets are closed in observance of Presidents' Day and the index is likely to end the day unchanged or little changed.
The Federal Reserve Bank of New York's Empire State Manufacturing Survey will be the only significant data featured in the US economic docket on Tuesday.
Technical levels to watch for