EUR/USD clears 1.1270 on USD sell-off

The common currency is extending its daily upside on Tuesday, now lifting EUR/USD to fresh 2-month highs in the 1.1260/65 band.

EUR/USD firmer ahead of data

The sell off in the greenback remains unabated so far today, giving extra wings to the pair and boosting it to the key 1.1260/70 region, where sits the retracement of the May-June drop and the 2014-2016 resistance line.

Ahead in the session, prior estimates see the ZEW Survey improving in both the euro area and Germany for the current month, which could in turn lend extra support to the pair’s upside momentum.

In the US docket, CPI figures, Building Permits/Housing Starts and the speeches by FOMC’s Lockhart and Bullard will take centre stage later.

EUR/USD levels to watch

The pair is now up 0.79% at 1.1271 and a break above 1.1306 (base of the 8-month rising channel) would open the door to 1.1346 (61.8% Fibo of the May-June down move) and finally 1.1434 (high Jun.24). On the flip side, the immediate support aligns at 1.1179 (38.2% Fibo of the May-June down move) ahead of 1.1115 (20-day sma) and then 1.1092 (200-day sma).