EUR/USD remains offered above 1.1700… for now

EUR/USD comes under pressure on further dollar recovery. EMU’s Industrial Production figures coming up next in the docket. US CPI takes centre stage followed by EIA, Fedspeak later in the session. EUR/USD briefly tested the vicinity of the key support in the 1.17 neighbourhood on Wednesday, managing to regain some pace soon afterwards. EUR/USD has tested once again the key contention area near 1.17 the figure during early trade, although sellers failed to push the pair further south. The recent weakness around spot came in response to overbought conditions following the July-August rally in combination with renewed sentiment towards the greenback. Indeed, the buck gathered extra steam in past hours pari passu with rising uncertainty surrounding the US political space, where another stimulus bill still remains stuck within discussions between Republicans and Democrats. Data wise in the bloc, Italian final CPI for the month of July is due seconded by Industrial Production figures in the broader euro area. Across the pond, July’s CPI is due along with Mortgage Applications the EIA’s weekly report and speeches by FOMC’s Rosengren, Kaplan and Daly.

What to look for around EUR

EUR/USD pushed higher and recorded new highs near 1.1920 in the second half of last week, triggering a corrective move to the 1.17 zone so far. The July-August rally; while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe; found extra sustain in auspicious results from domestic Fundamentals; which have been in turn supporting further the view of a strong economic recovery in the wake of the coronavirus fallout. Also lending wings to the momentum around the euro appear the recently clinched deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.

EUR/USD levels to watch

At the moment, the pair is retreating 0.06% at 1.1733 and faces the next support at 1.1695 (monthly low Aug.3) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally). On the other hand, a breakout of 1.1916 (2020 high Aug.6) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally).