EUR/USD clings to gains below 1.1600

• EUR bounces off lows near 1.1550.
• USD slightly bid on US tax reform headlines.
• Strong resistance around 1.1660 (neckline).

The single currency has given away part of its initial gains vs. the greenback and is now prompting EUR/USD to visit the lower end of the range in the 1.1580/90 band.

EUR/USD finds support near 1.1550

The pair is extending the sideline theme for the second consecutive week so far, looking to consolidate after the 2-cent drop following the ECB meeting in late October.

USD-dynamics keep dictating the sentiment around spot, with the US tax reform plan taking centre stage in detriment of prospects of further tightening by the Federal Reserve at the December 13 meeting, which appear almost fully priced in.

Regarding the latter, CME Group’s FedWatch tool noted the probability of higher rates next month at above 91%, always based on Fed Funds futures prices.

Data wise in Euroland, second-tier releases will see French trade balance figures and Spanish industrial production. Across the Atlantic, the EIA’s report on crude oil inventories will be the only release of note.

EUR/USD levels to watch

At the moment, the pair is up 0.03% at 1.1591 facing the next support at 1.1555 (low Nov.7) seconded by 1.1448 (high Jun.30) and finally 1.1280 (200-day sma). On the upside, a breakout of 1.1624 (10-day sma) would open the door to 1.1692 (high Nov.3) and then 1.1717 (21-day sma). Furthermore, FXStreet’s Technical Confluences Indicator (TCI) is noting an important resistance zone in the mid-1.1600s, where sit a pivot point and the hourly upper Bollinger Band.