- EUR/USD jumps to 3-week highs around the 1.1050 area.
- The dollar remains well on the defensive on coronavirus concerns.
- German jobless rate stayed unchanged at 5.0% in February.
The upside momentum in the shared currency is extending for yet another session on Friday and is lifting EUR/USD to fresh 3-week highs in the 1.1050/55 band.
EUR/USD: from hell to heaven in one week
EUR/USD is prolonging the rebound from last week’s 2020 lows in the 1.0780/75 band, advancing nearly 3 cents to levels above 1.1050 at the time of writing.
The sharp reversion in the pair comes on the back of an apparent change of heart around the greenback against the backdrop of unabated fears regarding the (still) unstoppable COVID-19 and increasing speculations on further easing by the Federal Reserve as soon as the March meeting. in this context, the US Dollar Index (DXY) has accelerated the downside to multi-week lows, just after printing 2020 highs during last week
In the docket, the German Unemployment Change dropped more than expected by 10K while the jobless rate remained unaltered at 5.0%. Further data saw Italian flash CPI coming in flat on a monthly basis and gaining just 0.4% from a year earlier. Later in the European afternoon, the German advanced CPI figures for the current month are also due.
Across the ocean, Personal Income/Spending are due along with January’s inflation figures tracked by the PCE, advanced Trade Balance results, the Chicago PMI and the final February gauge of the US Consumer Sentiment. In addition, St. Louis Fed J.Bullard (2022 voter, dovish) will discuss Economy and Monetary Policy.
What to look for around EUR
EUR/USD keeps the bid bias unchanged so far this week on the back of upbeat data in Germany and renewed (and strong) selling impetus around the buck. As usual, USD-dynamics are seen dictating the pair’s price action for the time being along with the broader risk appetite trends, where the COVID-19 remains in centre stage. On another front, the ECB is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change in the monetary policy before that time pretty flat. Further out, recent better-than-expected results in both Germany and the broader Euroland seems to have lifted spirits among traders regarding some recovery in the region.
EUR/USD levels to watch
At the moment, the pair is gaining 0.30% at 1.1032 and faces the next hurdle at 1.1053 (weekly high Feb.28) seconded by 1.1063 (61.8% Fibo of the 2020 drop) and finally 1.1098 (200-day SMA). On the downside, a breakdown of 1.0992 (monthly low Jan.29) would target 1.0914 (21-day SMA) en route to 1.0879 (monthly low Oct.1 2019).
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