EUR/USD flirting with tops around 1.1840

The upbeat momentum around the European currency stays well and sound so far this week and is now pushing EUR/USD to test the upper end of the range in the 1.1840/45 band, fresh daily tops.

EUR/USD attention to FOMC

The continuation of the broad sell-off around the greenback and the lack of traction in yields of the key US 10-year reference are lending extra legs to the pair’s rally, which is extending the upside for the fourth consecutive session so far.

Other than USD-weakness, EUR has been underpinned by auspicious results from the German industrial sector (Tuesday) and positive ECB-speak from board member S.Lautenschlaeger.

Ahead in the session, however, the current upside in spot should be put to the test in light of the publication of the FOMC minutes. According to Danske Bank, “FOMC minutes tonight are likely to confirm that the Fed is on track for a December hike, although with the market pricing this in with around a 70% chance, it may not change expectations much. However, the minutes may reveal more about how the Fed’s balance between a stronger economy and still too low inflation is viewed”.

Further out in the week, producer prices are due tomorrow followed by inflation figures measured by the CPI and retail sales.

EUR/USD levels to watch

At the moment, the pair is up 0.26% at 1.1839 and faces the initial resistance at 1.1911 (high Aug.2) followed by 1.2033 (high Sep.20) and finally 1.2094 (2017 high Sep.8). On the other hand, a break below 1.1767 (10-day sma) would target 1.1686 (low Oct.6) en route to 1.1662 (low Aug.17).