- EUR/USD clinched fresh 3-month tops in the 1.1380/85 band.
- Risk-on sentiment keeps ruling the global price action on Friday.
- All the attention remains on US Non-farm Payrolls later in the session.
Another day, another new highs in EUR/USD. This time the pair managed to extend the rally to the 1.1380/85 band during early trade, just to ease some pips afterwards.
EUR/USD boosted by ECB, now looks to US docket
EUR/USD prolonged the rally to levels last traded in mid-March in levels just shy of 1.1400 the figure at the end of the week.
The pair accelerated the upside on Thursday after the ECB left its benchmark interest rates unchanged, although it will increase the current PEPP by an extra €600 billion. The programme will now run until June 2021. In addition, the central bank, now sees the economy in the region contracting by nearly 9% in the aftermath of the coronavirus pandemic, while it is forecasted to recover in the next couple of years.
Also collaborating with the upbeat sentiment, economies around the world continue to ease their lockdown restrictions and remain well on track to gradually recover their normal life (kind of).
Earlier in the region’s docket, German Factory Orders contracted nearly 26% during April, the Spanish Industrial Production shed almost 34% on a year to April and Italian Retail Sales plummeted at a monthly 10.5% in April.
Across the pond, all the looks will be upon the release of May’s Non-farm Payrolls, with the US economy expected to have lost around 9 million jobs and the unemployment rate seen nearly 20%.
What to look for around EUR
EUR/USD has clinched fresh tops near the 1.1400 mark on Friday against the backdrop of increasing appetite for riskier assets. The rally in the euro remains well sustained by the gradual and relentless re-opening of economies in the Old Continent and by the latest round of extra stimulus announced by the ECB at its meeting on Thursday. On top, the solid performance of the region’s current account is also adding to the attractiveness of the shared currency.
EUR/USD levels to watch
At the moment, the pair is advancing 0.08% at 1.1346 and a breakout of 1.1383 (weekly/monthly high Jun.5) would target 1.1391 (monthly high Jun.13 2019) en route to 1.1412 (monthly high Jun.25 2019). On the downside, the immediate support aligns at 1.1186 (61.8% Fibo of the 2017-2018 rally) seconded by 1.1014 (200-day SMA) and finally 1.0926 (55-day SMA).
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