EUR/USD eases from highs, back below 1.1900

The single currency is trading on a firm fashion at the beginning of the week, now taking EUR/USD to the area around 1.1900/1.1890.

EUR/USD focus on NK headlines

Spot left behind Friday’s lows in the mid-1.1800s and moved beyond 1.1900 the figure earlier in the session in response to headlines citing North Korea could be preparing another ICBM launch in the very near term.

Daily gains, however, remain capped just above the 1.1900 handle as thin trade conditions are poised to prevail in light of the absence of significant data in the euro area and the Labor Day holiday in the US markets.

Looking ahead, cautiousness among market participants is expected to increase as we get closer to the key ECB meeting on Thursday. The idea of some sort of announcement regarding the central bank’s bond-buying programme seems to have lost momentum as of late, while recent news citing concerns among officials over the appreciation of the exchange rate have also weighed on occasional bullish attempts.

In addition, the speculative community has scaled back its EUR net longs to 2-week lows in the week to August 29, according to the latest CFTC report.

Data wise in the euro bloc, the Sentix index is next on tap seconded by July’s producer prices.

EUR/USD levels to watch

At the moment, the pair is gaining 0.22% at 1.1886 and a break above 1.1904 (high Sep.4) would open the door to 1.1981 (high Sep.1) and finally 1.2069 (2017 high Aug.29). On the downside, the immediate support lines up around 1.1828/22 (low Aug.31, 21-day sma and 2-month support line) seconded by 1.1773 (low Aug.25) and then 1.1721 (5-month support line).