EUR/USD trims gains, near 1.0660 ahead of Payrolls

After a brief test of 1.0690 in early trade, EUR/USD has now recede to the area of 1.0660 in response to a pick up of the demand for the greenback.

EUR/USD cautious ahead of US data

The pair keeps the buoyant tone well and sound so far this week, looking to consolidate the trade above the 1.0600 handle and at the same time implying that a temporary low at 1.0515 seems to be in place.

In the meantime, USD dynamics remain the exclusive driver for the pair’s price action in the near to medium terms, with a Fed’s move by year-end practically priced in by market participants, while the perspective of reflationary pressure in the US economy due to fiscal stimulus during the next presidential period keeps the underlying bullish tone on USD intact.

On the data front, EMU’s Producer Prices for the month of October are only due, while the US labour market figures will grab all the attention later in the day. Prior surveys expect the economy to have added 175K jobs during November, up from October’s 161K.

In addition, FOMC’s L.Brainard (permanent voter) and D.Tarullo (permanent voter) are due to speak.

EUR/USD levels to watch

The pair is now up 0.04% at 1.0663 and a break above 1.0690 (high Dec.2) would target 1.0700 (23.6% of the November drop) en route to 1.0820 (low Mar.10). On the flip side, the immediate support aligns at 1.0515 (2016 low Nov.24) followed by 1.0457 (2015 low Mar.16) and then 1.0332 (monthly low January 2003).