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EUR/USD drops further on EMU’s CPI

FXStreet (Edinburgh) - The shared currency loses further ground vs. the greenback on Wednesday, taking EUR/USD to the vicinity of 1.06 the figure.

EUR/USD weaker on CPI

Spot is testing the critical support at 1.06 after flash CPI figures in Euroland came in on the softer side during November, where headline consumer prices rose ‘just’ 0.1% on a yearly basis and Core prices have come in at 0.9% YoY vs. October’s 1.1% gain.

Markets’ main focus continue to be on tomorrow’s ECB meeting and press conference by President Draghi, where opinions amongst traders point to a dovish tone from the Council as long as announcements of further easing measures.

Ahead in the session, the ADP report and the speech by Chairwoman J.Yellen will take centre stage across the Atlantic. Prior surveys expect the US private sector to have added 190K jobs during November, vs.182K from the previous month.

EUR/USD levels to watch

As of writing the pair is losing 0.25% at 1.0606 facing the next support at 1.0519 (low Apr.13) en route to 1.0500 (psychological level) and then 1.0456 (2015 low Mar.16). On the other hand, a break above 1.0805 (monthly lows May and July) would expose 1.0829 (high Nov.12) and then 1.1013 (55-day sma).

Technically be cautious on EUR/USD, EUR/SEK – Deutsche Bank

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