EUR/USD visits daily lows near 1.1720, EMU CPI eyed

The renewed buying interest around the greenback is forcing EUR/USD to recede to the area of session lows in the 1.1725/20 band.

EUR/USD attention on CPI

Spot is trading on the defensive at the beginning of the week, fading part of the strength seen on Friday following the publication of US data and down from fresh tops near 1.1780 recorded on Thursday.

Speculative positioning at extreme levels as shown by the latest CFTC report plus solid performance from EUR futures markets continue to prop up the upside momentum in EUR.

In addition, the divergence in policy from the Federal Reserve and the European Central Bank continues to favour the single currency for the time being, as market chatter over the likeliness of ECB ‘tapering’ in the next months seems to have replaced the possibility of further tightening by the Fed.

In the meantime, EUR speculative net longs have receded to 2-weel lows during the week ended on July 25, as per the latest CFTC report.

In the data space, advanced inflation figures tracked by the CPI for the month of July are due later today in the euro area ahead of flash Q2 GDP prints expected tomorrow.

EUR/USD levels to watch

At the moment, the pair is losing 0.20% at 1.1727 facing the next support at 1.1655 (10-day sma) seconded by 1.1611 (high Jul.26) and finally 1.1527 (21-day sma). On the other hand, 1.1777 (2017 high Jul.27) seconded by 1.1800 (psychological level) and then 1.2166 (50% Fibo of the 2014-2017 drop).