EUR/USD climbs to daily highs near 1.1800, looks to ECB

The single currency appears to have regained the smile in the second half of the week and now lifts EUR/USD back to the vicinity of the 1.18 mark.

EUR/USD now looks to the ECB

EUR/USD looks to reverse the weekly downside and retake the key barrier at 1.18 the figure on the back of an improvement in the risk complex and the re-emergence of some mild selling pressure in the greenback.

On the broader scenario, the advance of the coronavirus pandemic remains unabated as well as the implementation of restrictions by many countries, all casting further shadows on the prospects of economic growth.

Later in the session, the focus of attention will be on the now online ECB Forum on Central Banking (formerly in Sintra) where ECB’s Lagarde will share a discussion panel with Chief Powell and BoE’s Bailey.

Earlier in the session, the final October CPI in Germany matched the preliminary prints and showed consumer prices rising 0.1% inter-month and contracting 0.2% from a year earlier.

Data across the pond will include October’s inflation figures measured by the CPI and usual weekly Claims ahead of the EIA’s report on crude oil stockpiles. In addition, FOMC’s Evans and Williams are due to speak.

What to look for around EUR

EUR/USD sticks to the consolidative mood in the lower bound of the recent range following Monday’s bearish “outside day”. In the very near-term, EUR/USD is expected to remain under scrutiny on dollar dynamics mainly coming from the US post-elections scenario and the progress of the coronavirus pandemic. On the more domestic front, the euro appears propped up by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), although the now more dovish stance from the ECB prompts some caution when comes to bullish attempts. As usual, the euro still looks supported by the solid position of the EMU’s current account.

EUR/USD levels to watch

At the moment, the pair is gaining 0.08% at 1.1786 and a break above 1.1920 (monthly high Nov.9) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1). On the other hand, the next support emerges at 1.1709 (Fibo level of the 2017-2018 rally) followed by 1.1700 (100-day SMA) and finally 1.1602 (monthly low Nov.4).