EUR/USD hits fresh 2-week highs near 1.1720, then retreats

  • US dollar softness and upbeat Draghi remains supportive of the Euro.
  • US retail sales to arrive at 0.4% m/m vs. 0.5% last in August.

The US dollar ran into to fresh offers in the European session, pushing the EUR/USD higher to print fresh two-week highs at 1.1721. However, the bulls faced exhaustion at the last and sent the rates back to test the 1.1700 level, where it now wavers.

EUR/USD: Eyes on US macro releases.

The spot extends its winning streak into a fifth straight day today and remains on track for the first weekly in three weeks. The positive tone seen around EUR/USD can be mainly attributed to broad-based US dollar weakness, induced by a miss on the US CPI numbers and easing US-Sino trade concerns.

Further, the European Union’s (EU) optimism on reaching a Brexit deal combined with upbeat remarks by the ECB President Draghi on the Eurozone economy also helps keep the buoyant tone intact around the common currency.  

However, over the last hour, the pair is seen retreating from two-week tops, as the greenback appears to have found some support across its main peers heading into the key US retail sales release. Meanwhile, downbeat Eurozone trade figures also cap the upside in the EUR.

EUR/USD Technical Levels

According to Slobodan Drvenica at Windsor Brokers, “Thursday’s close above falling 100SMA was bullish signal for final push towards 28 Aug high at 1.1733 and possible extension towards key Fibo barrier at 1.1780 (38.2% of 1.2555/1.1300 fall). Broken 100SMA should ideally hold, but deeper dips cannot be ruled out, with 1.1650 zone (former multiple upside rejections / broken Fibo 61.8% of 1.1733/1.1526 descend) expected to contain and keep bullish bias.”

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