EUR/USD off highs, focus back on 1.0900

After climbing as high as the vicinity of 1.0930 during overnight trade, EUR/USD has now surrendered part of its earlier gains and returned to the 1.0900 region.

EUR/USD bounced off 1.0860

The bearish tone remains well and sound around the pair so far this week, intensified however after Donald Trump was elected US President on Wednesday.

So far, sellers could not push spot further south of the 1.0860 region, although the renewed and strong demand for the greenback has recently opened the door for potential deeper pullbacks, with the initial target around March low at 1.0820.

In the meantime, market participants have shifted their focus back on US monetary policy and the likeliness of a rate hike by the Federal Reserve at its December meeting. Currently, odds for such an event remain above 71% according to CME Group’s FedWatch tool.

Data wise in Europe, German final inflation figures for the month of October have matched preliminary prints, showing the CPI rose at an annualized 0.8%, while the broader HICP saw prices up 0.7% YoY.

Across the pond, preliminary US Consumer Confidence for the current month is due later along with the speech by FOMC’s S.Fischer (permanent voter, hawkish).

EUR/USD levels to watch

The pair is now advancing 0.10% at 1.0907 and a breakout of 1.00958 (high Nov.10) would target 1.0974 (20-day sma) en route to 1.1029 (23.6% Fibo of the May-October drop). On the downside, the immediate support aligns at 1.0862 (low Nov.10) followed by 1.0850 (low Oct.25) and finally 1.0820 (low Mar.10).