EUR/USD tests session lows near 1.1720, German CPI eyed

The offered bias stays unchanged around the European currency on Thursday, with EUR/USD now dropping to the area of daily lows in the 1.1725/20 band.

EUR/USD attention to German CPI

Spot has been losing ground uninterruptedly since Monday, shedding more than 2 cents since tops in the 1.1960 region at the very beginning of the trading week and is currently eroding the key 200-week sma around 1.1720.

The renewed demand for the greenback, higher US yields and alleviated geopolitical concerns from the Korean Peninsula all keep weighing on the pair, which is already navigating fresh 5-week lows.

In fact, USD gained extra steam as of later amidst a strong pick up in yields of the US 10-year reference, reaching levels last seen in early July above 2.35% after the Trump administration unveiled its long-waited tax reform plan on Wednesday. The needle-like up move in yields widened the spread vs. the German peers, collaborating with the pair’s downside.

In the data space, German advanced CPI figures for the month of September will bet the salient event in Europe, seconded by sentiment/confidence gauges in the euro area during the same period.

EUR should also be under pressure in light of upcoming ECB-speak, as board members Hansson, Praet, Lautenschlager and Costa are due to speak later in the session.

Across the pond, US trade balance figures are due followed by initial claims and the third revision of US Q2 GDP. In addition, FOMC’s members Fischer, George and Bostic will also speak.

EUR/USD levels to watch

At the moment, the pair is losing 0.20% at 1.1724 and a breakdown of 1.1662 (low Aug.17) would target 1.1555 (100-day sma) en route to 1.1329 (low Jul.6). On the upside, the initial hurdle emerges at 1.1811 (55-day sma) followed by 1.1879 (10-day sma) and finally 1.1908 (21-day sma).