EUR/USD retakes the 1.1700 area after challenging monthly lows near 1.1680 during early trade.

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EUR/USD offered on USD-gains, looks to Sintra

EUR/USD adds to Friday’s downtick and keeps the door open to a potential move to the YTD lows in the vicinity of 1.1660 (August 20). The leg lower in the pair comes in response to the strong improvement in the dollar, which is in turn underpinned by the sharp bounce in US yields.

Indeed, yields of the US 10-year reference note approach the key 1.50% hurdle, levels last seen in late June, as investors continue to adjust the trading to the latest FOMC event and the hawkish message from Powell’s press conference.

In the euro calendar, the ECB’s M3 Money Supply expanded 7.9% in the year to August and Private Sector Loans rose at an annualized 4.2%. Additionally, Chairwoman Lagarde said that the central bank will keep a close eye on both wages and supply narrowing, while he talked down the impact of the current high inflation on the long-run inflation expectations.

The pair, in the meantime, will be vigilant on the upcoming ECB forum at Sintra on September 28-29, where C.Lagarde and other Board members are due to speak

Data wise in the NA session, Durable Goods Orders expanded more than expected 1.8% MoM in August and 0.2% excluding the Transportation sector. Later in the NA session, the Dallas Fed Manufacturing Index will also be published.

EUR/USD levels to watch

So far, spot is losing 0.20% at 1.1697 and faces the next up barrier at 1.1755 (weekly high Sep.22) seconded by 1.1784 (55-day SMA) and finally 1.1845 (weekly high Sep.14). On the other hand, a break below 1.1683 (monthly low Sep.23) would target 1.1663 (2021 low Aug.20) en route to 1.1602 (monthly low Nov.4 2020).