- The pair retreats from recent tops in the 1.1650 area.
- The greenback has started the week on a bid note.
- German IFO coming up next on the European docket.
After reaching the mid-1.1600s during early trade, EUR/USD has now given away those gains and dropped to test the 1.1600 level and below, finding some decent support at the same time.
EUR/USD now looks to IFO
The upside momentum in spot appears to have run out of legs in the critical 1.1650 region so far, prompting sellers to step in and drag EUR to the area of daily lows in the 1.1600 neighbourhood.
A better start of the week in the greenback, month-end flows and some profit taking in light of the recent sharp rebound appears to have combined to drive spot lower, in turn undermining further gains to the key 1.1690 region.
From the speculative community, EUR net shorts advanced to 2-week highs on the week to August 21, as per the latest CFTC report.
Later in the session, the German IFO survey will be the salient event in light of a vacuum of releases and events in the American economy.
EUR/USD levels to watch
At the moment, the pair is losing 0.14% at 1.1606 facing immediate contention at 1.1535 (21-day SMA) seconded by 1.1530 (low Aug.23) and finally 1.1492 (10-day SMA). On the other hand, a break above 1.1646 (high Aug.27) would target 1.1745 (high Jul.31) en route to 1.1792 (high Jul.9).
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