- EUR / USD retreats from new monthly highs near 1.2270.
- German business sentiment surprised to the upside in May.
- Consumer confidence in the US weakened modestly in May.
The buying pressure around the common currency remains firm and pushes EUR / USD to new 4-month highs in the 1.2265 / 70 region on Tuesday.
EUR / USD in 4-month highs
The EUR/USD registers gains for the second day in a row on Tuesday, extends the optimism seen at the beginning of the week and at the same time breaks above multi-day consolidation in effect for most of the past week.
The increasing selling bias around the US dollar emerges as the exclusive driver behind the moderate rise in torque, as investors look somewhat more convinced of the Fed’s commitment to maintain the mega accommodative stance for the moment.
Regarding the eurozone data, German business sentiment as measured by the IFO survey was above estimates at 99.2 points for the current month, while the German economy contracted 1.8% quarter-on-quarter in the first quarter and 3.4% from a year earlier, according to the latest GDP figures.
Regarding US data, consumer confidence in the US weakened modestly in May with the Conference Board Consumer Confidence Index dropping to 117.2 points from 117.5 in April, while US new home sales declined 5.9% month-on-month in April.
Investors could now follow the signs of a speech scheduled by Fed Governor Randal Quarles to seize some short-term opportunities around the GBP / USD pair.
EUR / USD levels
At the time of writing, the EUR / USD pair is gaining 0.33% on the day, trading at 1.2253. The next resistance is at 1.2266 (May 25 high), followed by 1.2300 (round level) and 1.2349 (January 6 high). On the other hand, a break below 1.2051 (May 13 low) would target 1.1985 (May 5 low) en route to 1.1966 (200-day SMA).
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