- EUR / USD extends the upside to around 1.1800.
- The market buzz about the US stimulus package gives the pair additional wings.
- Fed’s Powell participates in a panel discussion on digital currencies.
The European currency and its risky peers operate in a better mood and push the EUR/USD near the 1.18 barrier.
EUR / USD backed by risk appetite
EUR / USD has managed to test the 1.1790 area, an intermediate hurdle where the 55-day SMA sits, although the bullish momentum lost some vigor on Monday.
Meanwhile, renewed hopes for another US fiscal stimulus package have sustained improved sentiment in the risk complex, propelling currencies, stocks and high beta yields higher at the start of the week.
On another front, ECB President C. Lagarde said earlier in the session that climate change is expected to affect monetary policy going forward, while Vice President L. De Guindos said the economic recovery appears to be losing something traction.
Later in the week, the release of advanced PMIs in the region is expected to get all the attention.
What to look for around EUR
EUR / USD extends the bounce from last week’s lows at 1.1690 / 85. However, the outlook for EUR / USD remains constructive and bearish movements are considered only corrective. Furthermore, the positive bias of the euro continues to be underpinned by the favorable performance of domestic fundamentals (despite the fact that momentum appears somewhat mitigated in several regions), the ECB’s so far cautious attitude and the strong position of the EMU current account. .
Technical levels
At the moment, the pair is gaining 0.58% at 1.1781 and a breakout of 1.1830 (October 9 monthly high) would target 1.1917 (September 10 high) en route to 1.1965 (August 18 monthly high). On the other hand, the next support is located at 1.1688 (monthly minimum of October 15) followed by 1.1612 (monthly minimum of September 25) and finally 1.1495 (monthly maximum of March 9).
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Credits: Forex Street
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