EUR/USD eases-off fresh 2017 tops near 1.1420, German CPI eyed

The bulls take a breather in early Europe, after the next move higher seen in EUR/USD above 1.1400 duringt the Asian session, as markets await fresh fundamental drivers for further momentum.

EUR/USD: Eyes on German CPI, US GDP

The EUR/USD pair extends gains for the third straight session, as Eur traders continue to cheer the ECB’s hawkish bias, shrugging-off comments from anonymous ECB sources stating yesterday that the market misjudged ECB President Draghi’s comments delivered at the ECB Symposium on Tuesday.

Despite a minor-retreat, the spot remains near 1.1400 levels on the back of narrowing monetary policy divergence between both continents, especially after the latest hawkish tilt by major central bankers overshadow Fed’s plans for tightening as well as balance sheet normalization.

Meanwhile, the US dollar continues to remain on the offers near fresh eight-week lows against most of its major rivals, collaborating to the upbeat momentum in the spot. In the day ahead, it remains to be seen if the major can extend further upside above 1.14 handle, as the Treasury yield curve between 5-year notes and 30-year bonds steepened so far this session, after having fallen to the lowest levels since late-2007.

With the CB speeches out of the way, focus now shifts towards the economic data due on the cards this Thursday. From the Euroland, the German prelim CPI remain on tap, while the US final GDP and jobless claims data will be reported from the US docket.  

EUR/USD Technical Levels

According to Karen Jones, Analyst at Commerzbank: “EUR/USD outlook is positive: The Euro faces a huge amount of resistance directly overhead where we find the highs from mid 2016 circa 1.1429 and the two year resistance line at 1.1467. We suspect that these will hold the initial test. Above here will target 1.1616, the May 2016 high.  The market will stay immediately bid above the 1.1194 2 month uptrend and this guards the 1.1110 end of May low.“