EUR/USD eases from highs, back near 1.0550

The single currency has started the second half of the week on a firmer note, pushing EUR/USD back to the 1.0570 region, albeit deflating afterwards.

EUR/USD focus on data, USD

The renewed offered bias around the greenback has allowed spot to stage quite a significant rebound after briefly testing daily lows in sub-1.0500 levels on Wednesday.

In fact, minutes from the latest FOMC meeting published yesterday failed to sustain further the rally in the buck, prompting the current squeeze higher in the pair to the upper-1.0500s.

FOMC members coincided in the need for more tightening sooner than later, although they now see only modest risks of significant inflation and the likeliness of an unemployment overshoot. Despite a rate hike in March has not been ruled out, USD quickly faded the spike to the 101.70 area and is now looking to consolidate in the 101.30 region when gauged by the US Dollar Index.

In addition, EUR found extra buying interest after French presidential candidate F.Bayou abandoned the race for president, giving candidate E.Macron extra chances to beat far-right candidate M.Le Pen.

Data wise, German Q4 GDP figures and Consumer Climate tracked by Gfk are up next. Across the pond, the usual weekly report on the US labour market is due seconded by Chicago National Activity Index and the speech by Atlanta Fed D.Lockhart (he will retire end of month).

EUR/USD levels to watch

At the moment the pair is losing 0.03% at 1.0553 and a breach of 1.0498 (low Feb.22) would target 1.0452 (low Jan.11) en route to 1.0339 (2017 low Jan.3). On the upside, the next resistance lines up at 1.0593 (55-day sma) followed by 1.0682 (high Feb.16) and finally 1.0706 (38.2% Fibo of the November-January drop).