EUR/USD leaps to highs near 1.0640

The now softer tone around the US Dollar has put EUR/USD under some upside pressure at the beginning of the week, currently testing fresh daily highs near 1.0640.

EUR/USD attention to Sentix

Sellers could not break below the key support at 1.0600 the figure on Monday amidst a generalized, albeit tepid, risk aversion sentiment in the global markets, sparked after North Korea launched four ballistic missiles into the Sea of Japan.

Spot has regained the 1.0600 handle and above on Friday and managed to close its first week with gains after three consecutive losses, all despite Chair J.Yellen and many of her FOMC peers have signalled that the likeliness of a rate hike later in the month is well and sound.

In fact, according to agency Thompson/Reuters’s Fedwatch, the probability of higher rates at the March 15 meeting is above 85% based on Fed Funds futures prices.

In addition, EUR-buyers have quickly returned to markets on Friday after a French poll noted that candidate E.Macron was leading the citizens’ intention vote with 27% vs. far-right candidate M.Le Pen with 25.5%.

EUR remains supported as well from the positioning space, as net shorts have receded to 2-week lows, while Open Interest kept rising in the week to February 28, as per the latest CFTC report.

Later in the session, EMU’s Sentix Index for the month of March is due while Factory Orders and the speech by Minneapolis Fed N.Kashkari (voter, centrist) are expected across the pond.

EUR/USD levels to watch

At the moment the pair is up 0.16% at 1.0638 facing the next hurdle at 1.0654 (short term resistance line) seconded by 1.0675 (100-day sma) and finally 1.0682 (high Feb.16). On the flip side, a breakdown of 1.0492 (low Mar.2/Feb.22) would target 1.0452 (low Jan.11) en route to 1.0339 (2017 low Jan.3).