EUR/USD eases off from 2017 highs, holds comfortably above 1.12

The EUR/USD pair continued from where it left on Friday and extended its gains to a fresh high since November at 1.1263 on Monday. Following the upsurge, the pair went into a consolidation phase and moved sideways in the last few hours. As of writing, the pair was trading at 1.1250, up 0.3% on the day.

Earlier in the day, Germany's Chancellor Angela Merkel argued that the "too weak" euro was to blame for the contracting trade surplus in Germany, boosting the demand for the shared currency. Furthermore, analysts at Scotiabank suggested that the narrowing Germany-U.S. yield spreads are supporting the euro. 

• Germany-U.S. yield spreads have narrowed in a EUR-supportive way - Scotiabank

On the other side, the greenback continues to suffer as the political turmoil in the U.S. pushed the investors away ahead of the important events of Wednesday. First of all, the FOMC will release the minutes from its last meeting that took place on May 2-3. In addition, Republican Rep. Jason Chaffetz of Utah, chairman of the House Oversight and Government Reform Committee, determined May 24 as the deadline for the FBI to turn in the notes and recordings between the former FBI Director James Comey and President Trump. However, it is unclear if any of this information will be released to the public. On the other hand, Comey is scheduled to appear in an open session after May 29 Memorial Day Holiday to answer questions on the investigation into links between the Trump's election campaign and Russia.

• FOMC minutes preview - Nomura

Tomorrow's economic docket will feature GDP growth from Germany and Markit PMI data from Germany, the EU, and the United States. Also, FOMC members Kashkari and Harker will be giving speeches later in the NA session.

Technical outlook

The pair faces the initial hurdle at 1.1300 (Nov. 9 high) ahead of 1.1365 (Aug. 18 high) and 1.1400 (psychological level). To the downside, supports could be seen at 1.1200 (psychological level), 1.1160 (daily low) and 1.1100 (May 19 low).

• EUR/USD: Comfortable with core long view - Nomura