EUR/USD flirting with highs near 1.19 ahead of US payrolls
The demand for the single currency remains solid at the end of the wee, now pushing EUR/USD to the upper bound of the range just below the key 1.19 handle.
EUR/USD looks to NFP
The rally in the pair stays unabated for the time being, showing no signs of exhaustion despite its overbought condition, while the continuation of the selling bias around the greenback keeps underpinning the pair’s momentum.
Spread differentials between German and US 10-year yields remain a significant catalyst for the pair’s price action so far other than the already mentioned weakness surrounding USD, with spread points currently trading around 178 bps, near yearly lows.
Looking ahead, the main headwind for the continuation of the EUR-rally comes from the USD-side and the publication of July’s payrolls in the US economy. Consensus expects the economy to have added more than 180K jobs during last month although the other focus of attention will surely be on inflation pressures via wages, a gauge that remains laggard and is critical for the Federal Reserve.
EUR/USD levels to watch
At the moment, the pair is advancing 0.13% at 1.1885 facing the next hurdle at 1.1909 (2017 high Aug.2) seconded by 1.2040 (2012 low Jul.24) and then 1.2166 (50% Fibo of the 2014-2017 drop). On the other hand, a breakdown of 1.1773 (10-day sma) would target 1.1735 (38.2% Fibo of the 2014-2017 drop) en route to 1.1611 (low Jul.26).
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.
