EUR/USD keeps lows in the 1.0530 region, US data on sight

The selling pressure around the common currency is now picking up extra pace on Wednesday, relegating EUR/USD to the lower bound of the range around 1.0530.

EUR/USD weaker ahead of US key data

The greenback keeps its march north unabated during the first half of the week, dragging spot to fresh  multi-day lows in the 1.0530 area and opening the door for a potential challenge of last week lows in sub-1.0500 levels.

Supportive Fedspeak as of late has put a potential rate hike by the Federal Reserve at its March meeting back on the table, boosting the demand for the greenback mainly via a sharp rebound of yields in the US money markets.

Actually, CME Group’s FedWatch tool sees the probability of higher rates later this month at just above 35%, above 44% for the month of May and nearly 45% in June, always based on Fed Funds futures prices.

Later in the session, advanced German inflation figures for the month of February should put the recent pick up in the trend to the test. In the US data space, ISM Manufacturing should be the salient event, seconded by Personal Income/Spending, January’s inflation gauged by the PCE, Markit’s Manufacturing PMI and the speech by Dallas Fed R.Kaplan (voter, hawkish). At the end of the day, the Fed will publish its Beige Book.

EUR/USD levels to watch

At the moment the pair is losing 0.40% at 1.0535 and a breach of 1.0492 (low Feb.22) would target 1.0452 (low Jan.11) en route to 1.0339 (2017 low Jan.3). On the flip side, the next hurdle lines up at 1.0630 (20-day sma) followed by 1.0632 (high Feb.28) and finally 1.0682 (high Feb.16).