The softer tone in the US Dollar is allowing EUR/USD to regain the upper end of the recent range in the 1.0770/80 band.
EUR/USD poised for a test of 1.0830
The pair stays firm at the beginning of the week and reverting last Friday’s pullback amidst the continuation of the offered stance around the buck, particularly exacerbated in response to the Fed’s dovish rate hike at last Wednesday’s meeting.
Spot met increasing buying pressure during the second half of last week, clinching its fourth consecutive week with gains and gaining around two cents since lows just below the 1.0600 handle (March 14).
Furthermore, EUR derived extra support from the outcome of the elections in the Netherlands and some rumours citing the likeliness that the ECB could start tapering its QE programme in the next months.
In addition, EUR speculative net shorts have retreated further to levels last seen in late May in the week to March 24, as shown by the latest CFTC report.
Data wise today, German Producer Prices rose less than expected in February, while EMU’s Labour Costs Index and Wages in the euro zone are due later. Across the pond, the Chicago Fed National Activity Index is due later along with the speech by Chicago Fed C.Evans (voter, dovish).
EUR/USD levels to watch
At the moment the pair is gaining 0.32% at 1.0772 facing the next up barrier at 1.0829 (2017 high Feb.2) followed by 1.0873 (high Dec.8 2016) and then 1.1300 (high Nov.9). On the other hand, a breach of 1.0726 (low Mar.17) would target 1.0704 (low Mar.16) en route to 1.0647 (100-day sma).