EUR/USD finding tentative support near 1.0760 on charts Fibonacci level underpinning further down around 1.0669 European Central Bank rate outlook a source of supportRenminbi losses potentially another crutch for EUR/USDPatient Fed helps EUR/USD but debt ceiling a wild cardS&P PMIs, other business surveys, U.S. PCE data eyed

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The Euro to Dollar exchange rate's correction from year-to-date highs has appeared to peter out in recent trade, leaving intact support levels just beneath the market on the charts, though local economic data and developments across the Atlantic could yet see these tested again this week.

Europe's single currency opened the new week trading near two-month lows after testing an important Fibonacci support level near 1.0760 on the charts in early Friday trade before recovering its 100-day average near 1.08 in early hours of Europe's Monday session.

Dollar selling has helped steady the Euro since Federal Reserve Chairman Jerome Powell and others suggested interest rates could be left unchanged next month for the first time since January last year in the absence of an argument to the contrary from U.S. economic data in the interim.

"I suppose talking again is a step forward from where we were on Friday, when the dollar was being sold and gloom was descending," writes Kit Juckes, chief FX strategist at Societe Generale, in a Monday reference to discussions in Washington about the U.S. government debt ceiling.

"The US has no data anywhere near as important as the debt ceiling talks, but April PCE and the deflator will be interesting on Thursday," Juckes adds.

Above: Euro to Dollar rate shown at daily intervals with Fibonacci retracements of March rally indicating possible areas of technical support for the single currency, while selected moving averages denote possible support and resistance levels.

This Thursday and Friday's releases of Personal Consumption Expenditures reports covering consumer spending and inflation within the Fed's preferred measure of the consumer price basket are exactly the kinds of official statistics that could easily overturn the Euro-Dollar rate's apple cart.

The PCE inflation rate is the measure targeted by the Federal Reserve and so could upset market hopes for a June pause in the interest rate cycle this week if there is any similarity between U.S. inflation pressures and those in Canada where inflation surprised on the upside for April just last week.

A repeat performance in the U.S. would risk seeing the Euro ending the week on the back foot, although before then the U.S. government debt ceiling saga is likely to vie with S&P Global PMI surveys of Europe's manufacturing and services sectors and a host of other data for market attention.

"EUR/USD has been moved almost entirely by the dollar in the past week or so, as debt-ceiling news dominated. While this will remain the primary driver this week, some domestic news is likely to come into the mix on the euro side as well," says Francesco Pesole, an FX strategist at ING.

Above: Quantitative estimates of ranges for this week. Source Pound Sterling Live.

"On the European Central Bank side, we heard some rather hawkish comments by President Christine Lagarde, who reinforced her pushback against the notion of a pause: she will speak again on Wednesday," Pesole writes in Monday market commentary.

Market pricing of the European Central Bank interest rate outlook may also have helped to support the Euro in recent weeks having shifted in an even more hawkish direction whereby two further quarter percent increases in borrowing costs have become fully priced-in for the months ahead.

This has taken place amid mounting indications of a slowdown on the industrial side of the Euro Area economy, which is being echoed in other parts of the world including China where deteriorating economic figures were followed by losses for Renminbi exchange rates last week.

Renminbi price action is another influence likely to be at work in and around Euro rates this week with possibly supportive effects for as long as the Renminbi-Dollar rate avoids further bouts of sharp depreciation.

Above: Euro to Dollar rate shown at daily intervals alongside upside down Dollar-Renminbi rate and EUR/CNH. Click image for closer inspection.

"Following the break of USDCNY 7.00 the PBoC warned that it will "curb speculation", perhaps wary as USD deposits pick up. We think despite these warnings the PBoC may favour short term CNY underperformance," says Mitul Kotecha, head of emerging market strategy at TD Securities.

"While exports have held up lately, we expect pressure to intensify as external demand slows. Taken together with weaker activity data in April, the authorities may want to maintain a slightly weaker short term CNY bias to help provide some stimulus," Kotecha adds.

Last week's losses were slightly unusual in that they led to a trade-weighted depreciation of the Renminbi when the Chinese currency most often trades in a countercyclical fashion as if it were an Asian equivalent of the U.S. Dollar.

This trading pattern usually leads the currency to depreciate during periods of economic growth and strengthen during periods of economic weakness.

Above: Euro to Dollar rate shown at weekly intervals alongside upside down Dollar-Renminbi rate and EUR/CNH. Click image for closer inspection.