EUR/USD clings to gains below 1.0800 amid cautious markets

EUR/USD is holding gains below 1.0800 amid caution trading in early Europe on Monday. Traders resort to readjusting their US Dollar positions ahead of Tuesday's US CPI data, lending some support to the Euro. Speeches from ECB and Fed officials will be eyed. 

Technical Overview

1.0800 (Fibonacci 50% retracement level of the latest uptrend, 50-period Simple Moving Average (SMA) on the 4-hour chart, descending trend line) aligns as stiff resistance for EUR/USD.  If the pair clears that hurdle and starts using it as support, 1.0840 (100-period SMA) and 1.0870 (Fibonacci 23.6 retracement) could be seen as next resistances.

On the downside, interim support is located at 1.0760 (20-period SMA) before 1.0700 (psychological level, Fibonacci 61.8% retracement). 

Following a two-day rebound, EUR/USD failed to preserve its bullish momentum and closed virtually unchanged on Thursday. The pair continues to move sideways below 1.0800 as investors' search for fresh catalysts continues.

The US Dollar (USD) outperformed its rivals in on Thursday as the benchmark 10-year US Treasury bond yield stretched higher after the Department of Labor reported that there were 218,000 Initial Jobless Claims in the week ending February 3, down from 227,000 in the previous week. Nevertheless, the currency struggled to gather further strength and helped EUR/USD limits its losses as Wall Street's main indexes held steady.

Meanwhile, cautious comments from European Central Bank (ECB) officials seem to be further supporting the Euro. ECB policymaker Martins Kazaks said that he was not optimistic for a rate cut in Spring and Governing Council Member Francois Villeroy de Galhau noted on Friday that the central bank will probably cut rates this year. Similarly, policymaker Pierre Wunsch said on Thursday that there is value in waiting to get more comforting wage data before taking policy action.

The economic calendar will not feature any high-impact data releases on Friday. EUR/USD could show some signs of life toward the end of the European session amid week-end flows but investors could refrain from taking large positions.