EUR/USD extends gains above 1.1700, eyes 1.1730

• EUR/USD boosted by a US dollar rises further to 1.1718.
• Euro approaches key resistance level ahead of EZ data and Fed’s meeting.  

The EUR/USD pair broke above 1.1700 and climbed to 1.1718. The euro has been able to erase most of the losses the followed last week ECB meeting. The move to the upside was boosted by a decline of the US dollar across the board.  

The weak tone around the greenback started on Friday after US Q2 GDP data. Today’s numbers showed a bigger-than-expected increase in pending home sales and also in the Dallas Fed manufacturing index, but failed to offer support.  

On Tuesday, GDP and CPI data from the Eurozone is due. Inflation is expected to rise to an annual rate of 2.0% while growth is set to remain at 0.4% (quarterly). “With annual growth of the Eurozone inflation at 2.0% in July, inflation’s development is set to meet the targeted 1.7% average inflation growth rate projected in June’s staff macroeconomic projections of the ECB”, said Mario BlascakEuropean Chief Analyst at FXStreet.

On Wednesday, the Federal Reserve will announce its decision on monetary policy. No change in rates is expected. Many analysts expect no relevant signals from the Fed and a limited impact on the US dollar.  

Levels to watch  

EUR/USD was trading at daily highs, holding a strong bullish tone intraday, still moving in a range on a wider perspective. The pair moved closer to a downtrend line that stands at 1.1730: a break higher could open the doors to more gains with a target at 1.1750 and 1.1765.  

On the downside, immediate support could be located at 1.1700 followed by 1.1675 and 1.1660. A daily close under 1.1650 would point to further losses and to a potential test of 1.1600.