EUR/USD around 1.0650 ahead of ECB

The single currency remains on a firm note vs. the buck in the second half of the week, with EUR/USD hovering over the mid-1.0600s ahead of the ECB event.

EUR/USD well supported near 1.0620

Spot is back to the positive camp after yesterday’s pullback motivated by a string rebound in the demand for the greenback.

Recent strength in US Dollar has been backed by solid prints from the inflation figures during the last month of 2016, reinforcing the underlying up trend in consumer prices and adding to recent upbeat readings in US fundamentals.

In addition, Chief J.Yellen suggested on Wednesday that the current solid health of the US economy warranted gradual rate hikes ‘a few times a year’. Her comments fell in line with previous ones from FOMC governors, all supportive of a strong USD.

On the data front, the European Central Bank is expected to leave its monetary status quo unchanged at today’s meeting, while Draghi’s tone could be tilted to the neutral side despite the recent pick up of inflation in the region.

Data wise across the pond, Initial Claims are due along with Building Permits, Housing Starts, the Philly Fed Manufacturing Index and the DoE’s weekly report on crude oil inventories.

EUR/USD levels to watch

The pair is now up 0.17% at 1.0648 and a breakout of 1.0719 (high Jan.17) would open the door to 1.0798 (high Dec.5) and then 1.0873 (high Dec.8). On the flip side, the immediate support aligns at 1.0622 (low Jan.19) followed by 1.0577 (low Jan.16) and finally 1.0542 (20-day sma).