- EUR/USD moves higher and test 1.1150/55 band.
- Persistent USD-weakness behind the move in spot.
- Markets’ focus stays on the Brexit deal vote on Saturday.
The upside momentum around the single currency remains unabated so far this week and is now pushing EUR/USD to fresh 2-month tops in the 1.1150/55 band.
EUR/USD boosted by USD-selling
The rally in the pair is closing the third week with gains so far, managing to extend the up move further north of the key barrier at 1.11 the figure and shifting its focus to late August’s peak at 1.1163.
The disappointing performance of the Greenback in past weeks in combination with absent bad news from Euroland and rising optimism pre and post Brexit deal have all undermined the sentiment around the Dollar, relegating DXY to fresh 2-month lows in the 97.40 region.
Looking ahead, investors are expected to remain wary of the Brexit deal vote in the UK Parliament on Saturday. Next week will be a key one for the single currency, as preliminary PMIs in Core Euroland are due ahead of the ECB event.
What to look for around EUR
The upside momentum in the pair has extended further north of the critical 1.1100 handle against the backdrop of a weaker buck and optimism from the recently clinched Brexit deal. However, it is worth recalling that the positive 3-week streak in spot has been exclusively sponsored by the renewed offered bias in the Dollar and that the outlook in Euroland continues to deteriorate and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the longer run. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh further on EUR.
EUR/USD levels to watch
At the moment, the pair is gaining 0.18% at 1.1144 and faces the next barrier at 1.1152 (monthly high Oct.18) seconded by 1.1163 (high Aug.26) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the flip side, a break below 1.1050 (21-day SMA) would target 1.0994 (21-day SMA) en route to 1.0879 (2019 low Oct.1).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.