EUR/USD breaks higher to test 1.1660 on ECB’s Mersch, German Ifo eyed

The EUR/USD pair finally broke its overnight consolidative mode and jumped higher last hour in a bid to test the immediate resistance located near 1.1660 region.

EUR/USD awaits German Ifo

The spot continued to find fresh buyers near 1.1630 region and rallied nearly 30-pips to print fresh session highs of 1.1663 on the back of ECB policymaker Mersch’s optimistic remarks on the Eurozone’s growth prospects.

ECB’s Mersch: Ongoing economic expansion in Euro area provides confidence

Moreover, the US dollar stalled its recovery against its major rivals and came under renewed selling pressure in the Asian trades, which also prompted a fresh rally in EUR/USD. The USD index faded rejection at 93.91 levels and now trades near daily lows of 93.70 levels, down -0.10% on the day.

However, further upside looks dicey, as the latest downbeat Euro area manufacturing PMI readings continue to weigh on the sentiment around the Euro. Adding to this, markets also remain wary ahead of the German Ifo business climate release, which is expected to show a slight deterioration in the German business morale.

European Monetary Union Markit PMI Composite registered at 55.8, below expectations (56.2) in July

Germany Markit Manufacturing PMI below expectations (59.2) in July: Actual (58.3)

Later on Tuesday, the US consumer confidence data will provide fresh incentives to the US dollar, offering near-term trading opportunities to the markets.

EUR/USD Technical Set-up  

According to Karen Jones, Analyst at Commerzbank, “EUR/USD is positive: No change, the market remains bid and further gains look likely. Nearby support is provided by the short term uptrend at 1.1382 and the accelerated uptrend at 1.1497 and while above here, there is scope for 1.1713/36 the August 2015 high and long term Fibo, here we would look for signs of profit taking. The 200 week ma is also found in this vicinity at 1.1797.”