- EUR/USD accelerates the upside and moves to highs near 1.1850.
- Solid appetite for riskier assets sustains the upbeat sentiment in euro.
- US Initial Claims came in below the 1-million mark during last week.
EUR/USD is extending the upside momentum for another session on Thursday, managing to reclaim the mid-1.1800s and clinch fresh multi-day peaks at the same time.
EUR/USD stronger on USD-seling
As usual in the last couple of sessions, sellers appear to have resurfaced around the greenback, particularly after DXY failed to surpass the key barrier in the 94.00 neighbourhood.
Positive results in the ZEW survey and the Sentix index earlier in the week helped setting the firm note around the single currency. Adding to the improved sentiment in the broader risk galaxy, US weekly Claims rose less than expected while 10-year yields remain on the rise.
In the meantime, investors continue to look to any developments from a potential stimulus bill, still under debate among US lawmakers.
In the euro calendar, no surprises from the German CPI in July, with consumer prices contracting 0.5% inter-month and 0.1% from a year earlier.
What to look for around EUR
EUR/USD pushed higher and recorded new highs near 1.1920 in the second half of last week, triggering a corrective move that met solid contention in the 1.17 region for the time being. The July-August rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain in auspicious results from domestic fundamentals, which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis. Also lending wings to the momentum around the euro appear the recently clinched deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.
EUR/USD levels to watch
At the moment, the pair is gaining 0.47% at 1.1838 and a breakout of 1.1916 (2020 high Aug.6) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the downside, immediate support is located at 1.1695 (monthly low Aug.3) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally).
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