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

Dhwani Mehta FXStreet

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.

1. R3 1.0712
2. R2 1.0703
3. R1 1.0695
PP 1.0687
1. S1 1.0679
2. S2 1.0670
3. S3 1.0663

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.