EUR/USD rebounds to highs near 1.0780, ZEW on sight

Today’s offered bias around the buck is giving some respite to EUR/USD, sending it to the area of 1.0780, or daily tops.

EUR/USD focus on ZEW, US Retail Sales

The pair is posting moderate gains after yesterday’s test of fresh 2016 lows in the 1.0700 neighbourhood, levels last recorded back in January.

Spot shed around 6-cents since the spike to the boundaries of 1.1300 following early results of the US election last Wednesday, although a break below 1.0700 still remains elusive.

A solid demand for the greenback propped up by expectations of higher rates by year-end continue to drive the sentiment among traders almost exclusively, while hopes of fiscal stimulus and higher inflation after D.Trump was elected are also lending fresh legs to USD.

On the data front, German advanced GDP figures for the third quarter showed the economy is expected to have expanded at an annualized 1.5% and 0.2% QoQ, missing initial estimates. Further data later today will show EMU’s flash Q3 GDP figures and the ZEW Survey in both Germany and the euro area.

Across the pond, October’s Retail Sales are due followed by the NY Empire State Manufacturing index. In addition, Boston Fed E.Rosengren (voter, dovish) and FOMC’s Vice Chairman S.Fischer (permanent voter, hawkish) are due to speak.

According to the latest CFTC report, EUR speculative net short have decreased by around 8K contracts during the week ended on November 8, while Open Interest dropped by around 26K contracts.

EUR/USD levels to watch

The pair is now advancing 0.37% at 1.0777 facing the next hurdle at 1.0826 (high Nov.14) followed by 1.0848 (low Oct.25) and finally 1.0941 (20-day sma). On the other hand, a breakdown of 1.0706 (2016 low Nov.14) would target 1.0538 (low Dec.3 2015) en route to 1.0519 (low Apr.13 2015).