EUR/USD under pressure around 1.18

After testing the boundaries of 1.1850 on Friday, EUR/USD came under some selling pressure at the beginning of the week and is now toying with the 1.1800 handle, or daily troughs.

EUR/USD attention to ECB, FOMC, data

The pair has faded the initial optimism and is currently recording the first decline after three consecutive sessions with gains, including a bounce off 2-week lows in the vicinity of 1.1690 (August 9).

The now better tone around the greenback after investors seem to have digested the recent inflation figures and the positive performance from US yields are fuelling the daily leg lower amidst a vacuum of data/events in both the euro bloc and the US.

However, market participants should start shifting their focus to the ECB and FOMC minutes expected later in the week, with cautiousness growing bigger in light of potential clues on the ECB ‘tapering’ and the Fed’s plans to start reducing its balance sheet.

EUR/USD levels to watch

At the moment, the pair is losing 0.22% at 1.1796 and a breakdown of 1.1722 (21-day sma) would aim for 1.1687 (low Aug.9) and then 1.1611 (low Jul.26). On the upside, the next hurdle lines up at 1.1846 (high Aug.11) seconded by 1.1894 (high Aug.3) and finally 1.1911 (2017 high Aug.2).