The single currency has faded the initial up tick to the 1.1780 region vs. the greenback, now dragging EUR/USD to the area of session lows in the mid-1.1700s.
EUR/USD attention to US CPI
In the meantime, spot continues to trade within a sideline theme this week, consolidating somewhat the drop from last week’s fresh cycle highs beyond 1.1900 the figure (August 2).
EUR/USD stays choppy and mostly driven by USD-dynamics so far this week, while NK-led geopolitical effervescence continue to keep spot under pressure via safe haven demand (EUR/CHF and EUR/JPY).
Of note, however, is that spot has decoupled from US-GE 10-year yield spread differentials in recent weeks, which used to be the exclusive driver of the pair’s direction.
Ahead in the session, July’s US inflation figures gauged by the CPI will drive the sentiment in the global markets ahead of speeches by Dallas Fed R.Kaplan (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish).
Market consensus expects US headline consumer prices to have advanced 1.8% YoY, while prices stripping food and energy costs are seen up 1.7% over the last twelve months.
EUR/USD levels to watch
At the moment, the pair is retreating 0.16% at 1.1753 and a breakdown of 1.1719 (low Aug.9) would target 1.1702 (21-day sma) en route to 1.1611 (low Jul.26). On the other hand, the next hurdle aligns at 1.1797 (10-day sma) seconded by 1.1824 (high Aug.8) and finally 1.1893 (high Aug.4).
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