EUR/USD clinches highs above 1.0900, US data eyed

A bout of buying interest is now sending EUR/USD back above the 1.0900 handle, or session peaks.

EUR/USD firmer as USD losses momentum

After hitting fresh 8-month tops on Tuesday, the US Dollar Index is now losing ground for the second session in a row and allowing at the same time a rebound in the risk-associated space. However, the extent of the current leg lower in DXY remains to be seen, as expectations of a Fed’s rate hike in December remains firm, while CME Group’s FedWatch tool is showing the probability of such a move at above 70% today.

On the back of this renewed offered bias around the buck, spot has managed to bounce off the key support area in the mid-1.0800s seen yesterday to today’s top beyond 1.0900 the figure, printing at the same time its third day with gains so far.

Auspicious results from advanced PMIs in Euroland (Monday) and the German IFO (Tuesday) have lent extra support to EUR and somewhat limited the downside for the time being.

Data wise in the euro area today showed German Consumer Climate tracked by the Gfk survey coming in at 9.7 for the month of November vs. 10 expected and previous.

Across the pond, US Services PMI, New Home Sales, Goods Trade Balance and the weekly report on crude oil inventories by the DoE will keep the attention on the buck.

EUR/USD levels to watch

The pair is now up 0.13% at 1.0903 facing the next resistance at 1.0944 (2014-2016 resistance line) followed by 1.1015 (7-month resistance line) and then 1.1041 (post-ECB spike Oct.20). On the other hand, a breakdown of 1.0820 (low Mar.10) would target 1.0709 (2016 low Jan.5) en route to 1.0538 (low Dec.3 2015).