EUR/USD clinches fresh two-week tops beyond 1.1100

  • EUR/USD reaches new 2-week highs above the 1.11 mark.
  • DXY drops further and challenges the 98.00 support.
  • EMU Trade Balance figures, US Retail Sales next of relevance.

The upbeat mood around the shared currency remains well and sound so far this week and is now lifting EUR/USD to fresh multi-day peaks beyond 1.11 the figure.

EUR/USD looks to data, risk trends

After testing the area of 2019 lows near 1.0920 once again on Thursday, spot has managed to chart a bullish ‘outside day’ and retake the key 1.1100 barrier, as market participants continue to adjust to the recently announced ECB stimulus package.

In fact, following quite a volatile session on Thursday, EUR surprised markets after quickly reversing the post-ECB knee-jerk and positioning for extra upside. It is worth recalling that much of the ECB easing was already priced in, and the size of the QE at €20 billion per month was somewhat disappointing.

In addition, the selling bias continues to hurt the buck and is motivating the US Dollar Index (DXY) to drop and test lows in the 98.00 neighbourhood.

In the docket, German Wholesale Price Index contracted 0.8% MoM during August and dropped 1.1% on a yearly basis. Later, EMU Trade Balance results are expected along with Labour Costs figures.

EUR/USD levels to watch

At the moment, the pair is gaining 0.36% at 1.1103 and faces the next barrier at 1.1142 (55-day SMA) seconded by 1.1163 (high Aug.26) and finally 1.1183 (100-day SMA). On the flip side, a breach of 1.1030 (10-day SMA) would target 1.0925 (2019 low Sep.3) en route to 1.0839 (monthly low May 11 2017).

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