EUR/USD rejected above 1.1200, drops to 1.1185

The EUR/USD pair made several attempts to hold above 1.12 handle in the overnight trades, but in vain, as the bears took over control, extending the retreat in the spot from fresh yearly highs of 1.1214 reached last Friday.

EUR/USD eyes on PMIs, FOMC minutes

Heading into early Europe, the major remains largely side-lined in a 15-pips narrow range below 1.12 handle, as the bulls take a breather after the recent rally back by broad US dollar weakness. The greenback was heavily hit against its main competitors last week, in response to uncertainty over Trump’s admiration and fading June Fed rate hike expectations.

However, with the odds of a June Fed rate hike rising back to near 80%, the US treasury yields received a renewed boost, fuelling a relief-rally in the buck at the expense of the Euro. CME Group FedWatch's odds of a June rate hike rise back to 78.5%

Focus now shifts towards a flurry of key economic events due to be reported this week from both continents, with main highlight expected to emerge the FOMC minutes, durable goods and prelim GDP figures. In the meantime, the spot could get influenced by speeches from the FOMC member Harker and Kashkari, in absence of key macro updates slated for release today.

EUR/USD Technical Levels

Karen Jones, Analyst at Commerzbank notes: “EUR/USD near term is positive but over-stretched: The Euro’s pullback on Friday was tiny and it ended the week still bid. The recent high has yet to be confirmed by the daily RSI and caution is warranted. While dips lower hold over the near term uptrend at 1.0930, the market stays immediately bid. The market has potential to reach the 1.1300 November 2016 high and highs from mid 2016 circa 1.1400, however we believe it will struggle here from a longer term perspective.”