EUR/USD flirting with highs near 1.0550

The single currency is trading on the right footing at the beginning of the week, lifting EUR/USD to fresh daily tops in the mid-1.0500s.

EUR/USD gets traction from EUR/GBP

The pair is posting decent gains on Monday despite the greenback is also trading in the positive territory as market participants continue to digest Friday’s US labour market report.

Furthermore, spot is deriving extra support from the sharp rebound in EUR/GBP, as the selling pressure around GBP has accelerated in response to increased Brexit concerns.

On the data front, German trade surplus has come in near €22 billion during November, bettering estimates and ahead of EMU’s Sentix index and the jobless rate in the region.

Across the pond, the Fed’s Labor Market Conditions Index is due along with speeches by Atlanta Fed Dennis Lockhart (centrist, non voter) and Chicago Fed Charles Evans (voter, dovish).

Adding downside pressure to EUR, speculative net shorts have increased to 2-week peaks on the week to January 3, as shown by the latest CFTC report.

EUR/USD levels to watch

The pair is now gainig 0.15% at 1.0549 facing the next hurdle at 1.0619 (high Jan.6) would target 1.0654 (spike Dec.30) en route to 1.0663 (55-day sma). On the other hand, the immediate support aligns at 1.0471 (20-day sma) followed by 1.0387 (low Jan.4) and finally 1.0350 (2016 low Dec.20).