EUR/USD climbs to 3-month highs beyond 1.2200

EUR/USD finally surpasses the key 1.2200 barrier on Tuesday.
The sell-off in the dollar forces DXY to break below 90.00.
EMU flash Q1 GDP figures next of relevance in the euro docket.

Pablo Piovano FXStreet

The buying pressure around the single currency remains well and sound for yet another session and lifts EUR/USD to fresh 3-month peaks beyond 1.2200 the figure on Tuesday.

EUR/USD stronger on USD-selling

EUR/USD advances for the fourth consecutive session on turnaround Tuesday, extending the recovery further north the key 1.2200 barrier for the first time since later February.

The selling pressure around the greenback keeps gathering traction despite the steady performance of US yields. Closer to home, yields of the German 10-year Bund navigate the upper end of the range around -0.10% and lend further legs to the pair’s rally.

Also supporting the bounce in spot appears the generalized better mood surrounding the risk-associated universe.

Later in the euro docket, another revision of the Q1 GDP figures in the broader Euroland will take centre stage. Across the pond, Housing Starts and Building Permits will be in the limelight along with the weekly report on US crude oil inventories by the API.

What to look for around EUR

EUR/USD finally breaks above the key 1.2200 hurdle amidst the continuation of the recovery from last week’s lows in the mid-1.2000s, always on the back of the strong bounce in yields of the German 10-year Bund and the generalized upbeat tone in the risk complex. The sustained rebound in the pair also comes in response to the investors’ shift to the improved growth outlook in the Old Continent now that the vaccine campaign appears to have gained some serious pace and solid results from key fundamentals pari passu with the surging morale in the bloc.

Key events in the euro area this week: Advanced EMU Q1 GDP (Tuesday) – Final EMU April CPI (Wednesday) – German/EMU flash May PMIs, advanced Consumer Confidence (Friday).

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections.

EUR/USD levels to watch

So far, spot is gaining 0.58% at 1.2218 and faces the next hurdle at 1.2243 (monthly high Feb.25) followed by 1.2300 (round level) and finally 1.2349 (2021 high Jan.6). On the downside, a break below 1.1985 (monthly low May 5) would target 1.1955 (200-day SMA) en route to 1.1887 (61.8% Fibo of the November-January rally).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD recovers toward 0.7000 amid improving mood

AUD/USD is firming up toward 0.7000 in Asia on Tuesday, helped by improving market mood. A pause in the US Dollar rebound also aids the pair's upside. However, geopolitical risks and caution ahead of AI tech earnings report could limit the pair.

USD/JPY flatlines near 158.50 as markets seek direction

USD/JPY steadies around 158.50 in the Asian trading hours on Tuesday. Traders prefer to wait on the sidelines ahead of Japan’s National Consumer Price Index inflation data later on Friday. Meanwhile, elevated US bond yields provide some support to the US Dollar against the Japanese Yen.

Gold just failed at $4,150. This is the next stop

Gold prices trade without a clear direction on Tuesday, hovering around the $4,170 region per troy ounce and still struggling to regain upside traction following Monday’s pullback. In the meantime, lower US Treasury yields and a marked pullback in the US Dollar come in tandem with the yellow metal’s price action.

Crypto Today: Bitcoin, Ethereum, XRP tick lower amid mixed ETF flows

Bitcoin is trading above $81,000 on Tuesday, aligning with a lethargic tone in the broader cryptocurrency market. Altcoins, including Ethereum and Ripple, reflect Bitcoin’s lock-step price action, trading below $2,400 and $1.30, respectively.

Markets at a turning point: Bitcoin, Gold, FX and Tech react to a heavy macro week

The new trading week opens with a mixed but revealing picture across global markets. Indices, commodities, FX, tech stocks, and cryptocurrencies are all sending one message: risk appetite is alive, but it is cautious, selective, and highly sensitive to macro signals.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.