EUR/USD pair rises to monthly highs, ECB Draghi eyed

EUR/USD pair

The EUR/USD pair remains well bid, although struggles to prolong its three-day winning streak beyond 1.07 handle due to political concerns over the French elections and monetary policy divergence between the Federal Reserve and the European Central Bank.

As the markets digest Friday’s US NF and wages data, the latest leg higher in the major is mostly in response to fresh selling-wave seen behind the dollar against its main competitors. Despite the hourly wages data being lower than expected, the headline payrolls showed a solid rise sustaining the hopes for a March rate hike.

The euro will continue to be affected by the USD daynamics ahead of ECB Draghi’s speech and US Labor market conditions data later today. Meanwhile, the week ahead hold a plenty of risk events for the spot, including the FOMC decision, Dutch general elections and key US dataflow.

“It seems that plenty of traders are taking profit ahead of the fact, given that a hike is now fully priced in, and the real action this week will most likely come via the wording of the statement and Janet Yellen’s press conference. If so, above 1.0700 would see sellers nearby, at around 1.0715, and then again at 1.0750 although above that will find little resistance ahead of the early February high of 1.0829.” according to Jim Langlands at FXCXharts.

“On the other head, if 1.0700 caps it and we do head lower again, then support levels to watch will be at the minor Fibo levels of the rally from the 1.0494 trend low. If the Fed are overly hawkish in their growth outlook on Wednesday, we should see a return to dollar strength and, although some way off at present, a break of the recent 1.0525 pivot could retest the 1.0500/1.0490 area,” he added.

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