EUR/USD clings to gains near 1.0870, US CPI eyed

The single currency is looking to regain some traction this week, with EUR/USD stuck in the lower end of the weekly range in the 1.0870/60 band.

EUR/USD focus on US data

The pair has been losing ground since Monday’s rejection of multi-month tops in the 1.1020/25 band amidst a strong rebound in the greenback, always propped up by rising hopes of a Fed’s move at the June meeting.

Markets are already pricing in a rate hike next month above 80%, lending extra wings to the buck and fuelling the recovery of US yields despite the current loss of momentum. German yields also seem to have found some resistance following theis week’s upside, keeping intact the gap vs. their American peers.

In the data space, final German inflation figures for the month of April have matched the preliminary readings, while flash GDP results see the economy is expected to expand at an annualized 0.6% in Q1 and 1.7% on a yearly basis.

Market participants will be looking to the US data as the salient events today, as April’s CPI results are due followed by Retail Sales and the advanced gauge of May’s Consumer Sentiment.

In addition, Chicago Fed C.Evans (voter, centrist) and Dallas Fed P.Harker (voter, hawkish) are due to speak.

EUR/USD levels to watch

At the moment, the pair is advancing 0.02% at 1.0864 and a break above 1.0900 (high May 10) would target 1.0916 (23.6% Fibo of the April-May rally) en route to 1.0935 (high May 9). On the flip side, the next support aligns at 1.0838 (low May 11) seconded by 1.0826 (200-day sma) and finally 1.0819 (low Apr.24).