EUR/USD looks firmer beyond 1.2100, focus on US data

EUR/USD regains traction and surpasses 1.2100.
US German 10-year yields recede from recent tops.
US Retail Sales, U-Mich Index next of relevance.

Pablo Piovano FXStreet

The single currency picks up extra pace and lifts EUR/USD further north of the 1.2100 barrier so far at the end of the week.

EUR/USD stays bid ahead of US data

EUR/USD regains the smile in the second half of the week and manages to finally retake the area further north of 1.2100 the figure.

The softer note in the greenback plus the generalized upbeat sentiment in the risk-associated universe allows for the continuation of the upside momentum around the European currency.

In addition, higher German yields also lend extra legs to the recovery in the pair from weekly lows in the mid-1.2000s.

Data wise in Euroland, the ECB will publish its Accounts (minutes) from the latest meeting. Across the pond, the April’s Retail Sales will take centre stage seconded by the preliminary gauge of the Consumer Sentiment. In addition, Industrial and Manufacturing Production are due along with Capacity Utilization and Business Inventories.

What to look for around EUR

EUR/USD regains ground lost in past sessions and advances past the 1.2100 yardstick amidst a better tone in the riskier assets. In the meantime, 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: 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 0.22% at 1.2104 and faces the next up barrier at 1.2181 (monthly high May 11) followed by 1.2243 (monthly high Feb.25) and finally 1.2349 (2021 high Jan.6). On the downside, a break below 1985 (monthly low May 5) would target 1.1951 (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.

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