EUR/USD continues to fill the gap, around 1.1930

After bottoming out in the 1.1900 neighbourhood, EUR/USD seems to have found dip-buying interest and is now looking to regain the 1.1930 region.

EUR/USD attention to German elections

The pair is attempting to fill the initial gap to the 1.1900 area after investors’ first reaction to the German election results and the potential uncertainty the might arise in the periods ahead.

It worth mentioning that despite Merkel’s CDU/CSU bloc won the elections, the results were the worst since 1949. In addition, the far right AfD clinched 12.6% and this is viewed as a probable source of political uncertainty, while the SDU - former coalition partner - will now be opposition.

In the meantime, the greenback is trading on a firm fashion following a pick up in the risk-on sentiment after there was no H-bomb test from North Korea over the weekend.

News from the positioning front saw the speculative community scaling back its EUR net longs to the lowest level since late June during the week ended on September 19, according to the latest CFTC report.

Data wise in the euro bloc, the German IFO survey is due seconded by a slew of ECB-speakers (Draghi, Coeure, Constancio, Mersch). Across the pond, the Chicago Fed index is only expected, while NY Fed W.Dudley (permanent voter, dovish) and Chicago Fed C.Evans (voter, dovish) are also due to speak.

EUR/USD levels to watch

At the moment, the pair is losing 0.23% at 1.1929 and a breakdown of 1.1898 (low Sep.25) would target 1.1862 (low Sep.20) en route to 1.1837 (low Sep.14). On the upside, the initial hurdle emerges at 1.2006 (high Sep.22) followed by 1.2033 (high Sep.20) and finally 1.2069 (high Aug.29).