EUR/USD upside capped around 1.1300

The single currency has trimmed part of earlier losses vs. the greenback, with EUR/USD now hovering over the 1.1300 neighbourhood.

EUR/USD deflates on USD buying

The upbeat sentiment around the greenback remains the exclusive driver of the pair’s decline since Friday, sustained further after hawkish comments by FOMC’s Lockhart, Dudley and Williams have left the door open for a Fed’s rate hike at next month’s meeting.

The lack of follow through at recent highs near 1.1370 prompted investors to factor in the likeliness that an interim top could be in place, while the demand for USD has re-emerged ahead of the speech by Chair J.Yellen and another revision of flash US Q2 GDP figures on Friday.

Regarding positioning, speculative net shorts in EUR have been trimmed to the lowest level since July 12 during the week ended on August 16, according to the latest CFTC report.

EUR/USD levels to watch

The pair is now losing 0.26% at 1.1295 and a breach of 1.1263 (50% Fibo of the May-June down move) would target 1.1246 (2014-2016 support line) en route to 1.1188 (20-day sma). On the other hand, the next hurdle aligns at 1.1367 (high Aug.18) followed by 1.1434 (high Jun.24) and finally 1.1466 (high Apr.12).