EUR/USD finds support near 1.1260

The better tone in the greenback has prompted EUR/USD to deflate from recent YTD tops around 1.1280 to the current 1.1265/60 band.

EUR/USD attention to PMIs, ECB

Spot gathered extra traction after US non-farm payrolls failed to meet expectations during May, showing the economy added 138K jobs vs. 185K initially forecasted. The data impacted on US yields and forced the US Dollar Index to slip back to levels last seen in early November around 96.60.

Despite the results, USD managed to start this week on a better footing following a pick up in the risk-off trade, all in response to the attacks in London during the weekend, while expectations of a rate hike by the Federal Reserve later in the month remain high and somewhat underpinning the buck.

The ECB meeting will be the main event in Euroland ahead in the week. Market chatter is already pointing to a dovish tone from the central bank, particularly following last week’s advanced inflation figures for the month of May. Recent CPI readings seem to have alleviated rumours of a potential shift to a more hawkish tone from the ECB.

EUR/USD levels to watch

At the moment, the pair is down 0.12% at 1.1267 facing the next support at 1.1202 (low Jun.1) followed by 1.1122 (20-day sma) and finally 1.1108 (low May 30). On the other hand, a breakout of 1.1284 (2017 high Jun.5) would 1.1300 (high Nov.9 2016).