EUR/USD more optimistic, bounces to 1.0870

The shared currency remains entrenched in the negative territory at the end of the week, with EUR/USD now coming up from earlier lows in the mid-1.0800s.

EUR/USD attention to US data

The selling bias around EUR stays unabated this week, briefly sending spot to test 2-week lows near the ley support at 1.0850, level last seen in late October.

On the opposite side, the greenback is extending its march north always backed by the solid momentum in US yields and rising expectations of a Fed’s move by year-end. On the latter, CME Group’s FedWatch tool now sees the probability of higher rates in December at above 71% based on the Fed Funds futures prices.

In the US data space, November’s flash Consumer Sentiment tracked by the Reuters/Michigan index is due along with a speech by FOMC’s S.Fischer (permanent voter, hawkish).

Previously in Germany, October’s inflation figures have matched preliminary readings although market participants have largely bypassed the releases.

EUR/USD levels to watch

The pair is now retreating 0.19% at 1.0875 facing the next support at 1.0854 (low Nov.11) followed by 1.0848 (low Oct.25) and finally 1.0820 (low Mar.10). On the other hand, a breakout of 1.0958 (high Nov.10) would target 1.0974 (20-day sma) en route to 1.1029 (23.6% Fibo of the May-October drop).

To learn more about this topic, check our video analysis: