EUR/USD fades the spike to 1.1670, Fedspeak, Payrolls on sight

• Spot failed once again in the 1.1660/70 band.
• Fedspeak eyed ahead of Friday’s US payrolls.
• US tax reform and decision on next Fed Chief now on sight.

The European currency manages to keep the buoyant sentiment during the second half of the week, taking EUR/USD to the 1.1640 region after the earlier bull run lost impetus in the 1.1660/70 band.

EUR/USD now focused on payrolls

The pair is extending the choppy trade so far this week, keeping the somewhat narrow range with gains capped by the tough resistance area in the 1.1660/70 band, the ‘neckline’ of the H&S pattern prevailing since late July and that was breached in the wake if the ECB meeting.

The sideline theme around the pair remains underpinned by the choppy activity from yields of the US money markets, particularly in the key 10-year benchmark, which are now looking to consolidate the drop from last week’s tops around 2.48%.

Looking ahead, Friday’s US payrolls are the next risk event for the pair, while US-GE yield spread differentials remain poised to drive the sentiment in the near to medium term. In this regard, Trump’s decision on the next Fed Chief (expected later today) and the progress (or lack of it) of the Republicans-led tax reform plan will be crucial.

EUR/USD levels to watch

At the moment, the pair is gaining 0.28% at 1.1651 and a breakout of 1.1671 (high Nov.2) would target 1.1693 (10-day sma) en route to 1.1745 (21-day sma). On the flip side, the immediate support aligns at 1.1575 (low Oct.27) followed by 1.1448 (high Jun.30) and finally 1.1258 (200-day sma).