EUR/USD is extending its strong rally to the upside following upbeat economic indicators and taking advantage of the weak dollar. The GDP growth released yesterday showed that the economy has a strong annual expansion pace of 2.5%, the fastest growth rate since the first quarter of 2011. The ECB Vice President Vitor Constancio underlined during his speech on Monday, that the stimulus measures applied in the Euro area have been highly successful that is why “the euro-area economy is experiencing a broad-based, robust and resilient recovery." He signaled that they will not ease the stimulus measures soon. The EUR traders will keep a tab for the Eurozone’s final CPI report for the month of October, that will be published tomorrow. The headline inflation rate is forecasted to meet the preliminary figure of 1.4% following to consecutive months of 1.5%.
EUR/USD – Technical Outlook
The single currency is extending its gains against the greenback over the last five days, while today is approaching the next strong resistance level at 1.1880. The EUR/USD pair surged more than 2.2% since last Wednesday, following the rebound on the 1.1575 support barrier. After the sideways move created the previous couple of weeks, the price exposed above the consolidation area 1.1575 – 1.1690 and also, surpassed the 50 and 100 SMAs on the daily timeframe. If the price climbs above 1.1880, it will open the door for the 1.2035 resistance handle.
Remaining on the short-term timeframe, the RSI indicator is moving sharply higher in the positive territory and is approaching the overbought zone near the 70 level. Furthermore, the MACD oscillator is moving higher in the negative path near the zero line.
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