- The pair climbs to fresh weekly highs beyond 1.1200.
- EMU advanced Q1 GDP surprised to the upside.
- German flash inflation figures next of relevance.
The upbeat tone in the single currency remains well and sound on Tuesday and is now lifting EUR/USD to levels beyond 1.1200 the figure, or weekly highs.
EUR/USD bid after data, looks to German CPI
Spot is extending the sharp rebound from last week’s lows in the 1.1100 neighbourhood, gaining around a cent to the area above the key barrier at 1.1200 the figure.
EUR moves higher amidst an intensification of the selling pressure around the greenback and positive results from the euro calendar, which have in turn offset the lower-than-expected releases in the Chinese docket earlier in the day.
In fact, the German Consumer Climate stayed unchanged at 10.4 for the month of May while the Unemployment Change dropped more than expected by 12K. In addition, the economy of Euroland is seen expanding 0.4% inter-quarter during the January-March period and 1.2% on an annualized basis, while the jobless rate ticked lower to 7.7% in March, all prints coming in above expectations.
What to look for around EUR
The broad-based risk-appetite trends and USD-dynamics are posed to rule the sentiment surrounding the European currency for the time being, all in combination with the onoging US-China trade dispute and potential US tariffs on EU products. Despite today’s Q1 GDP figures surprised to the upside in the euro bloc, the view that the slowdown in the region could last longer that initially estimated remains unchanged for the time being, while the ECB is therefore likely to remain ‘neutral/dovish’ for the foreseeable future (say until mid-2020?). On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections in late May, as the populist option in the form of the far-right and the far-left movements appears to keep swelling among voting countries.
EUR/USD levels to watch
At the moment, the pair is gaining 0.23% at 1.1211 and a break above 1.1231 (21-day SMA) would target 1.1278 (55-day SMA) en route to 1.1323 (high Apr.17). On the other hand, immediate support emerges at 1.1109 (2019 low Apr.26) seconded by 1.0839 (monthly low May 11 2017) and finally 1.0569 (monthly low Apr.10 2017).
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