- EUR / USD’s daily rally reaches highs near 1.2070.
- The dollar falls further and breaks the 91.00 level.
- German 10-year yields rise to highs near -0.22%.
Buying pressure around the European currency accelerates and raises the EUR/USD to new 3-day highs around 1.2070.
EUR / USD offered by USD weakness
EUR / USD manages to return to positive territory after two consecutive daily pullbacks, recovering around a penny from weekly lows at the 1.1990 / 85 zone (Wednesday).
The renewed bullish momentum in the pair comes exclusively in response to mounting selling pressure hitting the dollar, particularly after somewhat disappointing data from the ADP report on Wednesday and dovish comments from FOMC members, who rejected any possibility of downsizing. (for the moment). ) and reiterating the idea that inflation spikes should be temporary.
At the beginning of the euro calendar, retail sales in the block expanded to 2.7% monthly in March and 12% over the previous year. In the US, initial claims increased by 498,000 from the prior week, advanced nonfarm productivity is expected to expand 5.4% qoq in the first quarter, and unit labor costs are forecast to contract by 0.3 % quarter-on-quarter during the same period.
What to look for around EUR
The EUR / USD bounces from the 1.1985 / 80 zone and seeks to rebound above the key psychological 1.20 level. Despite the pair’s ongoing corrective decline, the outlook for the single currency remains constructive as investors shift towards the improved growth outlook on the Old Continent now that the vaccine campaign appears to have gained serious pace and results. solid key fundamentals with rising morale on the block.
Technical levels
So far, the pair is gaining 0.48% to 1.2061 and faces the next ascending barrier at 1.2150 (monthly high of April 29) followed by 1.2243 (monthly high of February 25) and finally 1.2349 (high of February 6). from January). On the other hand, a breakout of 1.1985 (May 5 monthly low) would target 1.1942 (200-day SMA) en route to 1.1887 (61.8% Fibonacci from November-January rally).
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