EUR/USD retreats modestly after reaching fresh 6-month highs
|EUR/USD rose further and peaked at 1.1262, hitting the highest level since November. The pair then pulled back modestly and it is trading around 1.1235, almost 40 pips above Friday’s closing price.
The euro gained momentum during the European session when German Chancellor Merkel said that the euro was “too weak”. The pair bounced sharply from daily lows around 1.1160 and climbed back on top of 1.1200.
Dollar woes continue as Merkel says euro is too weak
The pair is headed toward the highest daily close since late-September as it continues to rally. During the last seven trading days it has risen in six.
EUR/USD outlook
Price has approached significantly the 1.13 handle. “There is nothing sacrosanct about the 1.13 level. Last year’s high was set near 1.1615. Ahead of that the charts suggest 1.1400 may be difficult to break, at least initially. Technical indicators are stretched, and the euro is through its upper Bollinger Band (~$1.1210), but are not suggesting a top is at hand”, wrote analysts from Brown Brothers Harriman. They see support in the 1.1080 - 1.1100 area.
In the very short-term, a relevant support is seen around 1.1205/10 (May 19 high / 20-hour moving average); a break lower could remove some intra-day momentum out of the US dollar.
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