- EUR/USD leaves Wednesday’s pullback behind.
- The dollar begins the European session on the defensive.
- First quarter advanced GDP and jobless claims stand out on today’s economic calendar.
The common currency appears to be strengthening and leads EUR/USD to attempt another move higher towards the 1.0700 zone.
EUR/USD is centered at 1.0750
EUR/USD manages to regain some traction to the upside and approaches the 1.0700 barrier. Exceeding this level should point to a possible challenge to the May high near 1.0750recorded earlier in the week.
The pair’s small gains occur amid retreating yields in US and German money marketsin a context of alternating trends in appetite for risk and following recent aggressive messages from ECB rate setters and the lack of surprises in the release of the FOMC minutes on Wednesday.
The Euro economic calendar will be empty on Wednesday and this should leave all eyes on the US Q1 GDP revision, followed by the usual weekly jobless claims and US Existing Home Sales data. .USA
What can we expect around the EUR?
The moderate bounce in the dollar tested the recent strong bullish momentum of the EUR/USD and caused a moderate drop to the 1.0640 area, where decent support seems to have emerged.
Despite the pair’s current bullish momentum, the general outlook for the common currency remains negative for the time being. As usual, the price action of the pair should reflect the dynamics of the dollar, geopolitical concerns and the divergence between the monetary policy of the Fed and the ECB.
Nevertheless, occasional pockets of common currency strength should be bolstered by speculation that the ECB could raise rates sometime in the summerwhile rising German yields, high inflation and a decent pace of economic recovery in the region also support improving sentiment around the euro.
EUR/USD levels
At time of writing, the EUR/USD is up 0.11% on the day, trading at 1.0688. Next resistance is found at 1.0748 (24th May high), followed by 1.0773 (55-day SMA) and 1.0936 (21st April high). On the other hand, a break of 1.0459 (low May 18), would target 1.0348 (low May 13) on the way to 1.0340 (low Jan 3, 2017).
Source: Fx Street
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