EUR/USD keeps lows in the mid-1.0900s, Fedspeak eyed

The demand for the single currency remains subdued at the beginning of the week, with EUR/USD now looking to consolidate in the 1.0960/50 band.

EUR/USD now focused on Fedspeak

The pair met increasing selling pressure after being rejected from earlier 6-month tops in the 1.1020/25 band, all in response to the boost of optimism following the victory of centrist Macron at the second round of the French elections.

Despite the ongoing pullback, spot keeps the constructive prospect unchanged, amidst diminishing political risks in Euroland, quite a persistent recovery in the bloc’s fundamentals and market expectations of the ECB shifting to a more hawkish tone in the upcoming meetings.

EUR is also deriving support from the speculative community, as net shorts have been trimmed to the lowest level since May 6 2014 at just above 1.6K contracts, according to the latest CFTC report during the week ended on May 2.

On the data front, German Factory Orders expanded 1.0% MoM in March while the Sentix Index rose to 27.4 for the month of May.

Across the pond, the Fed’s Labor Market Conditions Index is expected seconded by St Louis Fed J.Bullard (2019 voter, centrist) and Cleveland Fed L.Mester (2018 voter, hawkish).

EUR/USD levels to watch

At the moment, the pair is retreating 0.51% at 1.0941 facing the next support at 1.0880 (low May 3) followed by 1.0850 (low Apr.27) and finally 1.0832 (200-day sma). On the upside, a break above 1.1020 (high May 8) would target 1.1300 (high Nov.9 2016).