EUR/USD sits at monthly highs above 1.0700, ECB Draghi eyed

The EUR/USD pair remains well bid, although struggles to extend its three-day winning streak beyond 1.07 handle amid renewed political concerns over French elections and monetary policy divergence between the Fed and ECB.

The latest leg higher in the major is mainly in response to fresh selling-wave seen behind the US dollar versus its main competitors, as markets digest Friday’s US NFP and wages data. Despite below estimates hourly wages data from the US, the headline payrolls figures showed a solid rise, thus, keeping hopes for a March rate hike alive.

However, further upside looks uncertain amid fresh reports published over the weekend, citing two controversies around French presidential candidate Fillon, which boosts the chances of a Le Pen victory in the French elections, underscoring France’s exit from the EU. 

Later today, the major will continue to get influenced by the USD dynamics ahead of the ECB Draghi’s speech and US Labor market conditions data. Meanwhile, the week ahead hold a plenty of risk events for the spot, including the FOMC decision, Dutch general elections and key US dataflow.

EUR/USD Technical Levels                               

Jim Langlands at FXCharts noted, “It seems that plenty of traders are taking profit ahead of the fact, given that a hike is now fully priced in, and the real action this week will most likely come via the wording of the statement and Janet Yellen’s press conference. If so, above 1.0700 would see sellers nearby, at around 1.0715, and then again at 1.0750 although above that will find little resistance ahead of the early February high of 1.0829.”

“On the other head, if 1.0700 caps it and we do head lower again, then support levels to watch will be at the minor Fibo levels of the rally from the 1.0494 trend low. If the Fed are overly hawkish in their growth outlook on Wednesday, we should see a return to dollar strength and, although some way off at present, a break of the recent 1.0525 pivot could retest the 1.0500/1.0490 area,” Jim added.