EUR/USD off highs despite upbeat CPI, near 1.0430

The single currency has gathered extra traction vs. the buck today, pushing EUR/USD to fresh tops in the mid-1.0400s although losing some ground afterwards.

EUR/USD still firm on CPI

Spot is extending its rebound from yesterday’s fresh 14-year lows in the 1.0340/35 band, up around a cent following higher-than-expected advanced consumer prices in the euro area for the month of December.

The pair’s upside lacked of follow through in the area of 1.0450, however, as sellers stepped in and prompted EUR/USD to surrender part of the initial gains.

Later in the NA session, the current upside will be put to the test as market consensus expects the FOMC minutes to come in on the hawkish side, with the ‘dots plot’ and the potential overshooting of the Fed’s employment and inflation goals likely to be on top of the debate.

Further news for EUR showed speculative net shorts have decreased to levels last seen in late June 2016 during the week ended on December 27, according to the latest CFTC report.

EUR/USD levels to watch

The pair is now up 0.24% at 1.0431 and a breakout of 1.0534 (high Jan.2) would target 1.0654 (spike Dec.30) en route to 1.0687 (55-day sma). On the downside, the immediate support aligns at 1.0350 (2016 low Dec.20) ahead of 1.0339 (2017 low Jan.3) and finally 1.000 (psychological level).