Breaking: EUR/USD breaks above 1.10 on dollar weakness, levels to watch
|EUR/USD has jumped above 1.10, trading at the highest levels in a month. The US dollar is retreating across the board after the ISM Manufacturing Purchasing Managers' release. While the headline beat expectations with 41.5 points, the employment and new orders components fell below 30, a bearish sign.
On Thursday, the European Central Bank left rates and the Quantitative Easing programs unchanged but introduced a new lending scheme. The initial reaction was negative but Italian bonds stabilized afterward. The US Federal Reserve enhanced two lending programs this week – for municipal bonds and Main Street. The Fed also committed to buying bonds at "the amount needed" – putting pressure on the dollar.
It is essential to note that a significant chart of the upward move in EUR/USD can be attributed to end-of-month flows late on Thursday.
Here is the four-hour EUR/USD. It is trading at levels last seen in late March. The Relative Strength Index is flirting with 70, indicating overbought conditions. The next levels to watch are 1.1040 and 1.1090. Support awaits at 1.0970 and 1.0890.
-- more to come
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