EUR/USD bounces off lows near 1.1730

The shared currency remains entrenched in the negative territory so far this week, with EUR/USD now retaking the 1.1755/60 band after bottoming out in the vicinity of 1.1730 earlier in the session.

EUR/USD looks to USD for direction

Spot is trading in red figures since last Thursday, always against the backdrop of a better sentiment surrounding the greenback, which in turn continues to be supported by the positive performance of yields in the US money markets.

Earlier speech by President M.Draghi failed to spark some fresh attention around EUR, as he did not comment on monetary policy. In this regard, the next ECB meeting on October 26 has been growing in importance as of late in light of potential announcements regarding the current bond-buying programme.

In the meantime, the USD-space remains dominated by headlines from the run up to the successor of Chairwoman J.Yellen, the prospects of the tax reform proposed by the Trump administration and further tightening by the Federal Reserve, where another rate hike is almost priced in at the December meeting.

Data wise later in the US calendar, September’s housing starts and building permits are due seconded by the EIA’s report on crude oil inventories and speeches by Dallas Fed R.Kaplan (voter, hawkish) and NY Fed W.Dudley (permanent voter, centrist).

EUR/USD levels to watch

At the moment, the pair is losing 0.14% at 1.1749 and faces the initial support at 1.1737 (low Oct.17) seconded by 1.1686 (low Oct.6) and finally 1.1662 (low Aug.17). On the upside, a breakout of 1.1802 (21-day sma) would target 1.1841 (55-day sma) en route to 1.1882 (high Oct.12).