EUR/USD retreats from 1.12 ahead of PMIs

The shared currency is now surrendering part of the recent strong gains and is driving EUR/USD to the 1.1160 area, or daily lows.

EUR/USD looks to PMIs, ISM

The pair has started the week on the back footing, so far returning to the 1.1165/60 band after briefly testing the 1.1200 neighbourhood following last week’s rally.

Market participants seem to have already adjusted to Friday’s lacklustre Q2 GDP prints, and are now focusing on the key ISM Manufacturing due later in the NA session along with the final prints from July’s manufacturing PMIs in Euroland.

Regarding positioning, speculative net EUR shorts have climbed to the highest level since late February during the week ended on July 26, according to the latest CFTC report.

EUR/USD levels to watch

The pair is now losing 0.05% at 1.1168 facing the initial hurdle at 1.1200 (high Jul.29) followed by 1.1237 (100-day sma) and then 1.1274 (base of the 8-month rising channel). On the flip side, a breakdown of 1.1077 (200-day sma) would target 1.0950 (low Jul.25) en route to 1.0913 (post-Brexit low Jun.24).