EUR/USD meets daily contention near 1.1700, focus on Lagarde

• EUR/USD reverses the earlier move to the 1.1700 support.
• Risk-on sentiment stays firm at the beginning of the week.
• ECB’s C.Lagarde is due to speak later in the European afternoon.

The single currency starts the week on an upbeat mood and motivates EUR/USD to add to Friday’s gains and advance to the vicinity of 1.1750.

EUR/USD up on USD-selling

EUR/USD keeps the bid tone unchanged on Monday and extends the rebound from recent lows in the 1.1690/85 band.

In fact, the selling bias around the greenback boosts the demand for the risk complex at the beginning of the week and underpins the recovery in spot to the mid-1.1700s. Furthermore, and accompanying the sentiment, major stock indices in Euroland navigates a sea of green following Monday’s opening bell.

Earlier in the session ECB’s Luis de Guindos suggested the recovery in the region appears to have lost momentum, while Spanish economy minister N.Calviño sees the country expanding 13% in Q3 (wait... what?).

Moving forward, ECB President Lagarde will speak later in the session amidst and empty docket in Euroland. Across the pond, Fed’s Powell is due to speak along with FOMC members Williams, Harker and Bostic. In the US data space, the NAHB index is only scheduled for later on Monday.

What to look for around EUR

EUR/USD extends the bounce off last week’s lows in the 1.1690/85 band. The outlook on EUR/USD still remains constructive, however, and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), the so far cautious stance from the ECB and the solid position of the EMU’s current account.

EUR/USD levels to watch

At the moment, the pair is gaining 0.37% at 1.1756 and a breakout of 1.1830 (monthly high Oct.9) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18). On the other hand, the next support is located at 1.1688 (monthly low Ot.15) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9).