EUR/USD challenging lows near 1.0580

The greenback has managed to revert the initial negative tone and is now pushing EUR/USD to fresh lows in the proximity of 1.0580.

EUR/USD upside capped near 1.0640

Spot has failed to extend its initial gains further north of 1.0640 on Monday, sparking instead a correction lower to the area of daily lows near 1.0580 for the time being.

The greenback, in the meantime, seems to have recovered the smile after briefly losing the grip last Friday despite the supportive message from Chief J.Yellen at her speech in Chicago on ‘Economic Outlook’.

The optimism around EUR seems to have diluted after another elections poll from OpinionWay showed this morning that far-right presidential candidate Marine Le Pen continues to lead the vote intentions with 27% vs. candidate Emmanuel Macron in the first round, while the independent centrist would win a second round 60%-40% (prev. 62%-38%).

Somewhat supporting EUR, net shorts have receded to 2-week lows while Open Interest kept rising in the week to February 28, as per the latest CFTC report.

Data wise, better-than-expected Sentix index in the euro region did nothing to curb the selling mood around the common currency, while January’s Factory Orders and the speech by Minneapolis Fed N.Kashkari (voter, centrist) are due later in the US calendar.

EUR/USD levels to watch

At the moment the pair is losing 0.30% at 1.0589 and a breakdown of 1.0492 (low Mar.2/Feb.22) would target 1.0452 (low Jan.11) en route to 1.0339 (2017 low Jan.3). On the upside, the next resistance appears at 1.0654 (short term resistance line) seconded by 1.0675 (100-day sma) and finally 1.0682 (high Feb.16).