EUR/USD moves to fresh highs near 1.2080

EUR/USD remains bid and approaches the 1.2100 yardstick.
The dollar trades in in multi-week lows despite high yields.
Producer Prices in Germany rose 0.9% MoM, 3.7% YoY.

Pablo Piovano FXStreet

The upbeat sentiment around the shared currency remains well and sound and motivates EUR/USD to advance to new highs in the 1.2080 region on turnaround Tuesday.

EUR/USD supported by risk appetite

EUR/USD trades in the positive territory for the third consecutive session so far, always on the back of the renewed and quite moderate selling pressure in the greenback and investors’ preference for the risk-associated universe.

In fact, market participants accelerate their exodus from the safe haven space and bolster the ongoing upbeat mood in the riskier assets. This sentiment pushes EUR/USD to levels last traded in early March well above the psychological 1.2000 hurdle.

In addition, the risk appetite trends remain propped up by rising optimism on the recovery in Europe in combination with the firmer pace of the vaccine rollout.

In the euro docket, German Producer Prices rose at a monthly 0.9% in March and 3.7% over the last twelve months. Across the pond, the only release will be the usual API’s weekly report on crude oil inventories.

What to look for around EUR

EUR/USD moved to fresh peaks around 1.2080 and remains well poised to extend the upside to the 1.2100 neighbourhood in the short-term horizon. The continuation of the rally has been so far supported by the renewed offered bias in the dollar along with the investors’ shift to the growth prospect in Europe now that the vaccine campaign appears to have gained some serious pace. In addition, solid results from key fundamentals and the improvement in the sentiment in the euro area as of late also appear to bolster the momentum surrounding the single currency.

Key events in the euro area this week: ECB interest rate decision, President Lagarde’s press conference, European Commission advanced Consumer Confidence (Wednesday) – Flash April PMIs (Friday), ECB Lagarde speech.

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.

EUR/USD levels to watch

At the moment, the index is gaining 0.26% at 1.2068 and faces the next hurdle at 1.2079 (monthly high Apr.20) followed by 1.2243 (monthly high Feb.25) and finally 1.2349 (2021 high Jan.6). On the other hand, a breach of 1.1910 (200-day SMA) would target 1.1762 (78.6% Fibo of the November-January rally) en route to 1.1704 (2021 low Mar.31).

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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