EUR/USD firmer near 1.1950 on USD-selling

EUR/USD picks up extra pace and approaches 1.1950.
German flash CPI came in at -0.1% MoM and 0.0% YoY.
Fedspeak, Dallas fed index next on tap in the US calendar.

Pablo Piovano FXStreet

The upbeat tone in the European currency keeps pushing higher and lifts EUR/USD to the mid-1.1900s, or fresh daily highs, at the beginning of the week.

EUR/USD boosted by USD-weakness

EUR/USD is navigating the area of multi-day highs near 1.1950, starting the week on a positive note and always on the back of the generalized selling pressure hitting the greenback.

In the euro docket, German flash inflation figures measured by the CPI showed consumer prices are seen contracting 0.1% MoM and coming in flat on a year to August. Earlier, the Italian economy sunk nearly 13% QoQ during the second quarter and almost 18% on an annualized basis.

What to look for around EUR

EUR/USD broke above the multi-day rangebound theme last week and managed to regain the 1.19 mark and above, where it is now attempting to consolidate. The July-August rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain in auspicious results from domestic fundamentals - which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – as well as US-China trade headlines. Also lending wings to the momentum around the euro appear the deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.

EUR/USD levels to watch

At the moment, the pair is up 0.29% at 1.1937 and a move above 1.1965 (2020 high Aug.18) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the other hand, the next support is located at 1.1772 (weekly low Aug.26) seconded by 1.1754 (weekly low Aug.21) and finally 1.1695 (monthly low Aug.3).

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.

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