EUR/USD flirts with session highs near 1.1830

EUR/USD gains further momentum and prints daily highs.
US Retail Sales expanded 1.2% MoM during July.
US Industrial Production expanded 3.0% MoM during last month.

Pablo Piovano FXStreet

Further weakness in the greenback is helping EUR/USD to advance to the area of daily highs above 1.1830.

EUR/USD focused on data, USD-dynamics

EUR/USD is now posting gains for the fourth consecutive session, managing to leave behind the 1.1800 barrier as the selling pressure in the dollar keeps building up.

The unremitting bid tone in the risk complex sustains the upside in the pair, which remains well supported on a weekly basis by the 1.1700 neighbourhood (Wednesday).

Earlier in the session, flash GDP figures showed the euro area is expected to have contracted 12.1% QoQ during the April-June period and around 15% from a year earlier, both prints matching the preliminary readings.

In the US calendar, headline Retail Sales expanded at a monthly 1.2% while core sales expanded 1.9% inter-month. Additional data saw Industrial and Manufacturing Production expanding 3.0% MoM and 3.4% MoM, respectively, in July.

Later, the flash gauge of the U-Mich index for the current month will close the weekly calendar.

What to look for around EUR

EUR/USD pushed higher and recorded new highs near 1.1920 earlier in the month, subsequently sparking a corrective downside that met solid contention in the 1.17 region for the time being. 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. Also lending wings to the momentum around the euro appear the recently clinched 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 gaining 0.10% at 1.1824 and a breakout of 1.1864 (weekly high Aug.13) would target 1.1916 (2020 high Aug.6) en route to 1.1996 (high May 14 2018). On the other hand, the next support is located at 1.1711 (weekly low Aug.12) followed by 1.1695 (monthly low Aug.3) and finally 1.1495 (monthly high Mar.9).

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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