EUR/USD flirts with daily highs near 1.2150 ahead of German data

EUR/USD regains traction and advances to the mid-1.2100s.
German 10-year yields challenge monthly tops around -0.17%.
German, EMU ZEW survey next on tap in the calendar.

Pablo Piovano FXStreet

The single currency regains traction and pushes EUR/USD to daily highs in the 1.2150 region.

EUR/USD bid ahead of data

EUR/USD reverses the pessimism seen at the beginning of the week and manages to reclaim buying interest and re-visits the mid-1.2100s, or daily highs so far.

Coupled with the soft note in the dollar, yields of the German 10-year Bund climb to the vicinity of monthly highs around -0.17%, all rendering into extra wings to the pair amidst the better mood in the risk complex.

In the euro docket, the German/EMU ZEW survey will take centre stage later in the session. In the NA session, the NFIB Index comes up next followed by the JOLTs Job Openings and the API’s weekly report on US oil stockpiles.

What to look for around EUR

EUR/USD extended further the bounce off the 1.1985/80 band and faltered in the 1.2180 region so far, area coincident with a Fibo level (of the November-January rally). The rebound in the sentiment around the single currency stays constructive on the back of the investors’ shift to the improved growth outlook in the Old Continent now that the vaccine campaign appears to have gained some serious pace and solid results from key fundamentals pari passu with the surging morale in the bloc.

Key events in the euro area this week: German, EMU ZEW survey (Tuesday) – EMU Industrial Production, German final April CPI (Wednesday) – ECB Accounts (Friday).

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections.

EUR/USD levels to watch

So far, spot is gaining 0.13% at 1.2144 and faces the next up barrier at 1.2178 (monthly high May 10) followed by 1.2243 (monthly high Feb.25) and finally 1.2349 (2021 high Jan.6). On the other hand, a breach of 1.1985 (monthly low May 5) would target 1.1947 (200-day SMA) en route to 1.1887 (61.8% Fibo of the November-January rally).

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.

EUR/USD struggles to regain momentum in the low1.1600s

EUR/USD is giving some signs of life in the aftermath of two severe days of losses on Wednesday, reclaiming the 1.1600 hurdle and above on the back of the resurgence of a mild selling bias around the US Dollar. Moving forward, the usual US weekly Claims will take centre stage on Thursday ahead of Friday’s crucial NFP data.

GBP/USD tests key moving averages as growth downgrade weighs

GBP/USD was nearly flat on Wednesday, edging up 0.08% to settle around 1.3370 in a quiet session. The pair has fallen sharply from its late-January high near 1.3870 and is now testing the 200-day Exponential Moving Average, with this week's one-week forex heatmap showing Pound Sterling as one of the worst performers against the US Dollar, down about 1.4% on the week.

Gold recovers modestly despite intensifying Middle East crisis

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.