EUR/USD probing highs near 1.0640, USD tumbles

The renewed offered bias continues to hit the greenback on Wednesday, now allowing EUR/USD to record fresh session tops in the vicinity of 1.0640.

EUR/USD firmer ahead of US data, FOMC

Spot has recovered the smile after two consecutive sessions today, managing to rebound from Tuesday’s lows in the 1.0600 neighbourhood although still far from Monday’s peaks above 1.0700 the figure.

It will be a key day for the pair’s aspirations in the near to medium term as the FOMC will decide on the Fed Funds later in the European evening. Despite market participants have already priced in a 25 bp rate hike, the focus of attention have recently shifted to the ‘dots plot’ and the press conference by Chair J.Yellen.

It is worth mentioning that Fed speakers in past weeks have been supporting the idea of further tightening in the next months as well as some clues regarding the possibility of more than three rate hikes this year. Solid US fundamentals, a robust labour market and inflation heading towards the Fed’s target in the medium term were always cited as a favourable scenario for a less accommodative stance from the Federal Reserve.

Other than the FOMC gathering, US inflation figures gauged by the CPI are also due along with February’s Retail Sales, the Empire State index and the NAHB index.

Closer to home, elections in the Netherlands should remain in the limelight today, with a coalition government the most likely outcome according to prior surveys.

EUR/USD levels to watch

At the moment the pair is advancing 0.30% at 1.0636 facing the next up barrier at 1.0715 (high Mar.13) ahead of 1.0829 (2017 high Feb.2) and finally 1.0873 (high Dec.8 2016). On the downside, a breach of 1.0597 (low Mar.14) would target 1.0591 (20-day sma) en route to 1.0569 (low Mar.10).

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