EUR/USD trims losses post-EMU CPI, near 1.1740

After bottoming out in the vicinity of the 1.1720 area, EUR/USD managed to regain some traction and advance to the 1.1740 area in the wake of July’s flash CPI figures.

EUR/USD supported near 1.1720

The pair regained some steam after consumer prices in the euro area are expected to rise at an annualized 1.3% in July, matching consensus. Prices stripping food and energy costs are seen ticking higher 1.2% YoY, a tad above initial forecasts.

Additional data saw EMU’s unemployment rate ticking lower to 9.1% during June, bettering prior surveys.

In the meantime, spot has trimmed part of the initial pullback, although it still trades within the negative territory.

Further support for EUR comes from the divergence in policy from the Federal Reserve and the European Central Bank 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.

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.

EUR/USD levels to watch

At the moment, the pair is losing 0.08% at 1.1741 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).