EUR/USD: Bulls gathering pace for a test of 1.1300

Dhwani Mehta FXStreet

The EUR/USD pair refreshed fresh 2017 tops at 1.1267, following the release of upbeat Euro area PMI reports and German IFO numbers, and now consolidates the renewed uptick ahead of Fedspeak and US datasets.

EUR/USD: 1.1300 still on sight?

The major eased slightly from multi-month tops, as the shorter duration treasury yields picked-up pace amid increased expectations that the FOMC minutes due to be published tomorrow will keep a June rate hike very much in play, despite the Trump controversy and Budget plan release. The 2-year treasury yields, which mimic the interest rate expectations, inched +0.61% higher to 1.287%.

However, the EUR/USD retreat remains restricted amid broad based US dollar weakness and upbeat macro releases from the Euroland. Bert Colijn, Senior Economist at ING explains: “The Eurozone economy has maintained its excellent momentum in May as the composite PMI held out at 56.8, the same reading as in April. This indicates that growth in the second quarter continues to be strong and could even surprise on the upside on these strong figures.”

German May IFO: A big beat across all indicators

Next of relevance for the major remains the speech by FOMC member Kashkari, alongside the US flash manufacturing PMI and new home sales slated for release in the American session.

EUR/USD Technical Levels

Valeria Bednarik at FXStreet noted: “In the 4 hours chart, technical indicators have corrected modestly from overbought levels, and are currently attempting to regain the upside. The 20 SMA maintains its bullish slope, now providing a dynamic support near 1.1190.”

“An upward acceleration should lead to a test of 1.1300, the high reached immediately after US elections last November, with a break above it opening doors for an advance up to 1.1340. Short term buyers are aligned at 1.1220, the immediate support, followed by the mentioned 1.1190. Below this last, the pair can correct down to the 1.1140/60 region, where buying interest should return,” Valeria added.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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