EUR/USD retakes 1.0700 and above, ECB eyed

The now softer tone in the greenback is allowing EUR/USD to retake the key barrier at 1.0700 the figure and advance to session highs.

EUR/USD focus on ECB, US CPI

The pair met some buying interest today after dropping to fresh 2016 lows in the 1.0665/60 band on Wednesday, always in response to the continuation of the solid demand for the greenback, particularly following Trump’s win last week.

Adding to the broader bearish note around the pair, expectations of a Fed’s rate hike in December stay on the rise, with CME Group’s now seeing the probability of such event at above 90%.

Later in the session, EMU’s final October CPI figures are expected to match the preliminary readings, while ECB members Y.Mersch and P.Praet are also due to speak along with the publication of the ECB minutes.

Across the pond, inflation figures tracked by the CPI will grab all the attention, seconded by Housing Starts, Building Permits, the Philly Fed index and the weekly report on the labour market.

Still in the US, the greenback will remain in centre stage in light of the speeches by New York Fed W.Dudley (permanent voter, neutral), L.Brainard (permanent voter, dovish), Chicago Fed C.Evans (2017 voter, dovish) and the testimony by Chair J.Yellen on the ‘Economic Outlook’ before the Joint Economic Committee of Congress.

EUR/USD levels to watch

The pair is now advancing 0.19% at 1.0711 facing the next support at 1.0688 (2016 low Nov.15) ahead of 1.0538 (low Dec.3 2015) and then 1.0519 (low Apr.13 2015). On the flip side, a break above 1.0826 (high Nov.14) would target 1.0848 (low Oct.25) en route to 1.0921 (20-day sma).