EUR/USD finds support near 1.1700

The demand for the single currency stays subdued in the second half of the week, now forcing EUR/USD to trade in the vicinity of the 1.1700 key support, closer to yesterday’s troughs near 1.1690.

EUR/USD focus on US data, risk aversion

The pair has intensified its weekly decline as of late, now on its way to close the first week with losses after four consecutive advances, including a fresh cycle tops just beyond the 1.1900 key barrier (August 2).

EUR futures markets, extreme positioning and overbought conditions seem to have all combined to spark the ongoing leg lower in spot, which should face initial contention in the 1.1680 area, where today sits the 21-day sma.

Additionally, speculations of a potential dovish tone from President M.Draghi at the Jackson Hole (in light of the recent strong appreciation of the exchange rate) and somewhat dwindling expectations of a probable modification of its QE programme.

In the data space, and ahead of tomorrow’s critical CPI figures in the US economy, the usual weekly report on the labour market is next on tap seconded by producer prices and the speech by NY Fed W.Dudley (permanent voter, hawkish).

EUR/USD levels to watch

At the moment, the pair is retreating 0.20% at 1.1730 nand a breakdown of 1.1719 (low Aug.9) would target 1.1667 (21-day sma) en route to 1.1611 (low Jul.26). On the other hand, the next hurdle aligns at 1.1785 (10-day sma) seconded by 1.1824 (high Aug.8) and finally 1.1893 (high Aug.4).