EUR/USD upside fails at 1.0600, US data eyed

The demand for the single currency is now losing further momentum, prompting EUR/USD to retreat from earlier tops in the 1.0600 neighbourhood.

EUR/USD now looks to Trump, US releases

Choppy start of the week for the pair so far, finding quite strong resistance around the 1.0600 handle while Monday’s lows in the mid-1.0500s keeps offering initial support.

Spot remains poised for a cautious trade today ahead of the SOTU speech by President D.Trump later in the European night. Investors expect Trump to shed further light on his fiscal plans in particular, although market expectations could face another disappointment in light of his recent reluctance to delve into this matter.

Additionally, the French political arena keeps growing bigger as a potential source of extra volatility around EUR in the near to medium term, while yield spread differentials between US and German money markets – especially in the shorter end of the curve – seem to have gathered extra weigh as a pair’s driver in the last sessions.

USD dynamics should stay as the main driver for the pair’s price action today as key US Q4 GDP figures are due later in the NA session, followed by the S&P/Case-Shiller Index, Trade Balance results, Chicago PMI and CB’s Consumer Confidence, all along with speeches by Philly Fed P.Harker (voter, hawkish) and San Francisco Fed J.Williams (2018 voter, neutral).

EUR/USD levels to watch

At the moment the pair is up 0.05% at 1.0591 facing the initial hurdle at 1.0633 (high Feb.27) followed by 1.0642 (20-day sma) and finally 1.0682 (high Feb.16). On the flip side, a breach of 1.0492 (low Feb.22) would target 1.0452 (low Jan.11) en route to 1.0339 (2017 low Jan.3).