EUR/USD grinding lower to the 1.1760 area

The selling bias stays unabated around the single currency on Monday and is now dragging EUR/USD to print fresh daily lows in the boundaries of 1.1760.

EUR/USD attention to US data, Spanish politics

The pair started the week on the defensive following increased political uncertainty after the recent developments from Catalonia, where latest news cited the region is expected to announce the independence from Spain in the next days. However, unless the situation morphs into some more sustainable threat to political stability, EUR is unlikely to react further.

In addition, the better tone from US yields gave extra oxygen to the buck, boosting the US Dollar Index to fresh daily tops and at the same time collaborating further with the pair’s correction lower.

Ahead in the week, the pair is poised to remain under pressure in light of a busy US calendar – with Payrolls on Friday being the salient event – and the ECB minutes to be published on Thursday, while headlines from the Trump's tax reform proposal will also be on top of investors' agenda.

Further out and from the positioning front, EUR speculative net longs climbed to fresh 3-week peaks in the week ended on September 26, according to the latest CFTC report.

Today’s calendar in Euroland includes final manufacturing PMIs for the last month, while September’s ISM manufacturing, Markit’s manufacturing PMI and the speech by Dallas Fed R.Kaplan (voter, hawkish) are all expected across the pond.

EUR/USD levels to watch

At the moment, the pair is losing 0.45% at 1.1765 and a breakdown of 1.1717 (low Sep.27) would target 1.1662 (low Aug.17) en route to 1.1572 (100-day sma). On the upside, the initial up barriers aligns at 1.1833 (high Sep.29) followed by 1.1853 (10-day sma) and finally 1.1902 (21-day sma).