EUR/USD on a firmer note near 1.1330, session highs

  • The pair pushes higher on renewed USD-selling.
  • The greenback faces further downside pressure near 96.40.
  • Focus of attention remains on key Brexit votes tonight.

The sentiment in the riskier assets continues to improve in the first half of the week and is now lifting EUR/USD to test the area of daily highs in the proximity of 1.1330.

EUR/USD bid on risk-on trade

The pair is up for the second session in a row today, extending the optimism seen at the beginning of the week and testing the key 21-day SMA in the 1.1320/30 band.

EUR stays bid following an improved mood in the risk-associated complex on the back of rising optimism around the Brexit negotiations and in light of crucial votes at the House of Commons tonight.

In the data space, German Consumer Climate gauged by GfK deflated to 10.4 for the month of April and it has somewhat weighed on the upbeat momentum following a rebound in the German IFO published yesterday.

Across the pond, house prices tracked by the S&P/Case-Shiller Index, Housing Starts, Building Permits and the CB’s Consumer Confidence are all due later.

What to look for around EUR

Market participants have left behind the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends, USD-dynamics and domestic data. Regarding the latter, and looking to the broader picture, the view of a slowdown in the bloc has been ‘confirmed’ last week following disappointing advanced PMIs in core Euroland. This, in turn, should add to the idea of a ‘patient for longer’ stance from the ECB. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.

EUR/USD levels to watch

At the moment, the pair is gaining 0.05% at 1.1317 and a break above 1.1357 (55-day SMA) would target 1.1363 (100-day SMA) en route to 1.1448 (high Mar.20). On the other hand, initial support emerges at 1.1273 (low Mar.22) seconded by 1.1234 (low Feb.15) and finally 1.1215 (2018 low Nov.12).

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