- EUR / USD regains traction and advances above the 1.2150 region.
- German 10-year yields challenge monthly highs around -0.17%.
- ZEW economic sentiment data for Germany and the Eurozone beat expectations and hit all-time highs in May.
The common currency regains traction and pushes EUR / USD to new daily highs just above the 1.2150 region. At the time of writing, the pair is holding around 1.2165 after the release of ZEW economic sentiment data for Germany and the eurozone.
At the same time, the EUR / USD reverses the pessimism seen at the beginning of the week, manages to regain buying interest and rises again above 1.2150.
With weaker tone around the US dollar, 10-year German Bund yields rise near monthly highs around -0.17%, which translates into additional strength for the pair amid the better mood of risk appetite.
Regarding the euro data, Germany’s ZEW Economic Sentiment Index rose to 84.4 from 70.7 in May April, significantly exceeding the 72 expected by the market. This is the best figure ever recorded in the data history. For its part, the ZEW of economic sentiment in the Eurozone has shot up almost 18 points, rising to 84, the highest figure in history, from the previous 66.3.
Across the Atlantic, the NFIB index will be released today, followed by JOLT job postings and the API’s weekly report on US oil reserves.
What can we expect around the EUR?
EUR / USD has continued to extend the bounce from the 1.1985 / 80 region and faltered in the 1.2180 region so far, the area coinciding with a Fibonacci retracement of the November-January move. The rebound in sentiment around the common currency remains constructive thanks to an improvement in investor sentiment due to the improvement in growth prospects in the Old Continent, now that the vaccination campaign appears to have gained a serious pace, along with solid fundamental data with rising morale on the block.
Key events in the eurozone this week: Industrial production of the euro area, CPI end of April for Germany (Wednesday) – ECB accounts (Friday).
Eminent Background Issues: Asymmetric economic recovery in the region. Sustainability of the rebound in inflation figures. Progress of the vaccine launch. Likely political turmoil around the EU Recovery Fund. German elections.
EUR / USD levels
At the time of writing, the EUR / USD pair is gaining 0.29% on the day, trading at 1.2164. The next bullish barrier is at 1.2178 (May 10 high), followed by 1.2243 (February 25 high) and 1.2349 (January 6 high). On the other hand, a breakout of 1.1985 (low on May 5), would target 1.1947 (200-day SMA) on the way to 1.1887 (61.8% Fibonacci retracement of the November-January move).
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
