EUR/USD trims losses, regains 1.1800

The single currency remains on the defensive at the beginning of the week, with EUR/USD now retaking the 1.1800 handle and above.

EUR/USD supported near 1.1780

Some dips-buyers seem to have emerged around session lows near 1.1780, where sits the 10-day sma, all following the poor performance of the key US 10-year benchmark, which are extending the downside to the 2.28% neighbourhood.

Further out, EUR seems to have left behind the recent results from elections in Lower Saxony, which saw a defeat of Merkel’s party, while alleviated concerns over Catalonia appear also propping up the rebound in EUR.

Data wise, EMU’s trade surplus shrunk to €16.1 billion in August, also coming in below estimates. Across the pond, the NY Empire State manufacturing index is next on tap.

Further news for EUR comes from the positioning front, where speculative net longs increased to the highest level since December 27 2011 during the week ended on October 10, as per the latest CFTC report.

EUR/USD levels to watch

At the moment, the pair is losing 0.16% at 1.1803 and faces the initial support at 1.1781 (low Oct.16) followed by 1.1686 (low Oct.6) and finally 1.1662 (low Aug.17). On the upside, a breakout of 1.1843 (55-day sma) would target 1.1911 (high Aug.2) en route to 1.2033 (high Sep.20).