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EUR/USD flirts with lows near 1.1770 post-EZ CPI

  • DXY regains poise on rallying shorter-duration T-yields.
  • Suffers due to risk-friendly market environment. 
  • Unimpressed by Eurozone final CPI.
  • US data, tax reform vote eyed.

The EUR/USD pair keeps losses and remains within the lower bound of today’s trading range so far, as markets prefer to hold the US currency amid risk-on sentiment and ahead of the key US House vote on the tax reform plan.

EUR/USD trades below 100-DMA at 1.1796

Having failed several attempts to sustain above 1.18 handle in early Europe, the spot came under fresh selling pressure and reverted to the Asian low of 1.1770, after the European stocks traded firmer and boosted the risk-on moods across the markets, weighing down on the funding currency Euro.

Moreover, renewed strength seen in the shorter duration Treasury yields, in response to heightened odds of a Dec Fed rate hike on upbeat US CPI figures, also added to the weight on the EUR/USD pair.

Meanwhile, a lack of any positive surprises offered by the Eurozone CPI data further collaborated to the downbeat tone seen around the major. The European Monetary Union Consumer Price Index (MoM) meets forecasts (0.1%) in October

 

All eyes now remain on the US data flow and tax reform vote for the next direction on the pair. The US docket offers the jobless claims, industrial production, import prices and Philly Fed manufacturing index.

EUR/USD Technical Levels

Karen Jones, Analyst at Commerzbank, noted: “EUR/USD correction higher remains in force. It is approaching the recent high at 1.1880 and the 61.8% retracement at 1.1886 has seen initial failure, but this has so far been tepid and the market is capable of retesting 1.1880/86, beyond here the chart neutralizes (it has already negated the top pattern). Near-term dips are indicated to terminate circa 1.1740/20.”

 

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