The sentiment surrounding the common currency remains negative, with EURUSD is nursing losses for a sixth day in a row. The pair is flirting with the 1.12 important support for the first time in nearly a month, and a break below this level could open the way towards 2019 lows around 1.1175.
Poor inflation figures in the euro area confirmed the slowdown in the region, which suggests the ECB won’t dare to start hiking rates in the medium term. In the short term, signs of waning risk-on sentiment after strong Chinese data add to the negative pressure on the euro. Meanwhile, the dollar demand persists, motivating the pair to decline further.
In the longer-term, political risks will rise for the single currency in light of the upcoming parliamentary elections in the EU, with the potential increase of the populist power could hurt the euro and drive the pair substantially lower.