EUR/USD rebounds from 1.0710 ahead of IFO

The mild bid tone around the greenback has prompted EUR/USD to briefly test lows in the 1.0710 region, just to bounce later to the current 1.0730/35 band.

EUR/USD now looks to IFO

The pair is looking to revert the negative tone seen at the beginning of the week following a rejection from recent highs in the 1.0770/75 band amidst a pick up in the demand for the US Dollar.

The Trump-led sell off in USD seems to have run out of momentum this week, although global markets keep watching closely the developments from the US political scenario as the main driver behind the buck’s price action.

Recall that President Trump commented last week about the headwinds that face the US manufacturing and export sectors from a strong buck, in turn hurting the greenback and sending the US Dollar Index lower despite the broad context was the US-China trade.

Looking ahead, the German IFO is due later, with consensus expecting an improvement in all of its components for the month of January.

EUR/USD levels to watch

The pair is now up 0.01% at 1.0732 facing the initial hurdle at 1.0773 (high Jan.23) followed by 1.0798 (high Dec.5) and then 1.0873 (high Dec.8). On the flip side, a break below 1.0682 (low Jan.23) would open the door to 1.0665 (short-term support line) and finally 1.0600 (20-day sma).