EUR/USD bounces off lows, looks to retake 1.0600

After bottoming out in fresh 2016 lows near 1.0580, EUR/USD is now looking to regain the 1.0600 neighbourhood ahead of the opening bell in Euroland.

EUR/USD weaker on USD-buying, focus on Fedspeak

The pair met increasing selling pressure following auspicious results from the US docket on Thursday, showing healthy inflation figures and solid readings from the labour market and the housing sector, all supportive of the buck.

Spot dropped as low as the 1.0580 area during overnight trade, as the dollar continued to gather traction after the testimony by Chair J.Yellen paved the way for a rate hike ‘relatively soon’. CME Group’s FedWatch tool sees the probability of a Fed’s move in December at nearly 91% based on Fed Funds futures prices.

In terms of the US Dollar Index, the buck climbed well above the 101.00 handle, levels last seen in April 2002.

Second tier data is expected later in the euro area, whereas speeches by St. Louis Fed J.Bullard (voter, dovish), New York Fed W. Dudley (permanent voter, neutral), KC Fed E.George (voter, hawkish) and Dallas Fed R.Kaplan (2017 voter, neutral) should keep the attention on the dollar.

EUR/USD levels to watch

The pair is now losing 0.26% at 1.0596 facing the next support at 1.0538 (low Dec.3 2015) ahead of 1.0519 (low Apr.13 2015) and finally 1.0457 (2015 low Mar.16). On the flip side, a break above 1.0763 (high Nov.16) would aim for 1.0826 (high Nov.14) and then 1.0848 (low Oct.25).