EUR/USD loses upside traction beyond 1.1070

The upbeat momentum around the single currency remains well and sound in the European afternoon, with EUR/USD now losing some upside traction in the 1.1070/80 band.

EUR/USD focused on data, yields

The pair is extending the choppiness so far today although always within the familiar range and below the key barrier at 1.1100 the figure.

EUR met some increasing buying interest following the moderate rebound in yields of the German 10-year reference, narrowing at the same time the spread differential vs. their US peers.

In the docket, the Greenback showed no reaction after the always-relevant Philly Fed manufacturing index came in above estimates at 12.0 for the current month. Additional data saw Initial Claims rising at a weekly 208K and taking the 4-Week Average to 212.25K from 213.00K and Q2’s Current Account deficit shrunk to $128.2 billion.

What to look for around EUR

The single currency is extending the choppy trading so far this week in the wake of the key FOMC gathering on Wednesday. EUR lost some shine following the recent peaks beyond 1.11 the figure, recorded after the ECB announced €20 billion/month in bond purchases under the re-launched QE programme. The occasional recovery in spot, however, is seen as corrective only always against the backdrop of unremitting slowdown in the region, looser for longer monetary conditions by the ECB and the likelihood that the German economy could slip into technical recession in Q3. Adding to this gloomy scenario, potential US tariffs on imports of EU cars remain well on the table, while persistent uncertainty around Brexit adds to the downbeat outlook.

EUR/USD levels to watch

At the moment, the pair is gaining 0.35% at 1.1067 and faces the initial hurdle at 1.1109 (monthly high Sep.13) seconded by 1.1163 (high Aug.26) and finally 1.1176 (100-day SMA). On the flip side, a break below 1.0990 (low Sep.16) would target 1.0925 (2019 low Sep.3) en route to 1.0839 (monthly low May 11 2017).