The EUR/USD rose to a high of 1.1168, before falling below its 5-DMA at 1.1165 to trade at 1.1147 levels. The better-than-expected year-on-year first quarter German GDP helped the EUR strengthen, although gains could not be sustained on the back of an unfavorable yield spread. German 10-year weakened 2 basis points, while its US counterpart stayed largely unchanged. The pair could make another attempt to take out 1.1180 levels, in case the German IFO sentiment indices paint an optimistic picture. All three indices - current assessment, expectations, and business climate are expected to show a slight deterioration in May. Ahead in the day, a better-than-expected US CPI, especially the core CPI would weigh over the pair.
At the moment, the pair is trading at 1.1165; above 1.1156 (23.6% R of 1.1465-1.1060). An hourly close above the same could open doors for 1.1215 (38.2% R of 1.1465-1.1060) and 1.1227 (23.6% R of 1.0461-1.1465). The previous session’s high of 1.1180 is likely to act as strong resistance. However, an hourly close above 1.1156 is likely to see the pair take out 1.1080. On the downside, only a failure at 1.1180 and subsequent break below 1.1156 could trigger fresh selling pressure towards 1.1060.
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