EUR/USD surrenders gains, back near 1.0670

The upside bias around the single currency remains intact so far, despite EUR/USD has faded the initial spike to session tops near the 1.0700 handle.

EUR/USD focus on Trump

The pair is clinching its fifth consecutive week with gains so far, always with the renewed weakness around the greenback as the exclusive driver behind the up move.

USD has almost fully faded the Trump-led rally since mid-November - which lifted the US Dollar Index to levels seen over a decade ago near the 104.00 barrier and relegated spot to fresh 14-year lows near 1.0340 on January 3 – allowing EUR/USD to regain traction and visit the 1.0700 neighbourhood in recent sessions.

On its meeting yesterday, the ECB delivered an unexpected dovish message, talking down the recent pick up in consumer prices in the region and ruling out any modification of the current purchases of bonds. Once again, President Draghi reiterated that tapering was not discussed.

The subsequent knee-jerk in the pair found decent support around 1.0580, prompting buyers to return to the markets and push EUR/USD around a cent higher to today’s peaks near 1.0700 the figure.

Later in the session, USD will take centre stage in light of Trump’s inauguration. Furthermore, Philly Fed Patrick Harker (voter, hawkish) and San Francisco Fed John Williams (2018 voter, centrist) are also due to speak.

EUR/USD levels to watch

The pair is now up 0.02% at 1.0667 and a breakout of 1.0719 (high Jan.17) would open the door to 1.0798 (high Dec.5) and then 1.0873 (high Dec.8). On the flip side, the immediate support aligns at 1.0622 (low Jan.19) followed by 1.0580 (short-term support line) and finally 1.0554 (20-day sma).