EUR/USD decline halted around 1.0620

The sell off around the European currency seems to have run out of steam in the 1.0620 area on Monday, with EUR/USD now looking to stabilize in the 1.0630/35 band.

EUR/USD weaker on USD rebound

The pair shed over a cent from earlier tops near 1.0740 to current lows in the vicinity of 1.0620, where buyers seem to have emerged.

Higher inflation figures in Germany expected for the current month – albeit below consensus – did nothing to dent the strong offered bias in spot today, while mixed results from the US docket appear to have, at least, stopped the downside for the time being.

The solid pick up in the demand for the greenback has propelled the US Dollar Index to fresh multi-day tops in the 101.00 neighbourhood, although it lost some momentum soon afterwards.

The better tone around EUR in recent weeks found support from the speculative positioning, with net shorts deflating to levels last seen in late May around 52.3K contracts during the week ended on January 24 and according to the latest CFTC report.

US data showed Personal Income rose 0.3 inter-month in December (vs. 0.4% exp.), while Personal Spending surprised to the upside rising 0.5% on a monthly basis. Further US data showed inflation figures measured by headline Personal Consumption Expenditures rising at 1.6% on a year to December, while Core PCE rose 1.7%.

EUR/USD levels to watch

The pair is now losing 0.60% at 1.0635 and a breach of 1.0620 (low Jan.30) would target 1.0587 (55-day sma) en route to 1.0577 (low Jan.16). On the upside, the immediate resistance aligns at 1.0740 (high Jan.30) followed by 1.0775 (high Jan.24) and finally 1.0798 (high Dec.5).