EUR/USD is losing height in Asia, eyes Eurozone CPI release

EUR/USD clocked a session high of 1.0661 before losing altitude to trade around 1.0638 levels ahead of the Eurozone CPI release.

The preliminary CPI reading for November is expected to show the cost of living in the Eurozone ticked higher to 0.6% y/y. German labor market data and ECB President Draghi’s comments could also influence the pair.

Focus on Italian bank shares

A ‘no vote’ victory in the Italian referendum on Sunday is widely seen destabilizing the Italian banking sector. Consequently, the EUR traders are likely to keep an eye on the action in the Italian banking shares. The 10-year Italy-German bond yield spread would also be on the watch list.

Later in the day, the dollar side of the story could come into play following the release of the US personal spending and ADP private sector employment report.

EUR/USD Technical Levels

A breach of the confluence of 5-DMA and 10-DMA at 1.0605 would open doors for a drop to 1.0563 (Nov 28 low), under which the Nov 24 low of 1.0518 stands exposed. On the other hand, a break above 1.0661 (session high) could yield a rally to 1.0685 (Nov 28 high) and 1.0746 (Nov 17 high).