EUR/USD turns negative around 1.1880, dollar regains the smile

EUR/USD came under some selling pressure soon after hitting fresh monthly peaks in levels north of 1.19 the figure on Friday.

EUR/USD now looks to a test of 1.1975

EUR/USD now sees its upside momentum mitigated on the back of some mild recovery in the greenback.

In fact, the pair corrects lower following the early move beyond 1.19 and after spot hit the overbought territory on the hourly chart (as per the RSI). Furthermore, EUR/USD remains on track to close the week in the positive ground following two consecutive weekly pullbacks.

Positive results in the euro docket are also supportive of the upbeat momentum in the pair after preliminary GDP figures in the euro area now see the region expanding 2.0% QoQ during the April-June period and 13.7% from a year earlier. In Germany, the economy is now expected to expand 1.5% inter-quarter and 9.6% on an annualized basis.

Regarding inflation in Euroland, flash data now see the headline CPI rising 2.2% vs. July 2020 and 0.7% when comes to the Core CPI.

In the US, the inflation tracked by the PCE rose 4% YoY in June and 3.5% excluding food and energy costs. Additional data noted the Personal Spending expanded 1.0% MoM during last month and Personal Income rose 0.1% MoM.

Later in the NA session, the final U-Mich print for the month of July will close the weely docket.

EUR/USD levels to watch

So far, spot is down 0.05% at 1.1879 and a breakdown of 1.1751 (monthly low Jul.21) would target 1.1704 (2021 low Mar.31) en route to 1.1602 (November 2020 low). On the upside, the next hurdle is located at 1.1908 (weekly high Jul.30) followed by 1.1975 (weekly high Jun.25) and finally 1.2004 (200-day SMA).