EUR/USD recovers, ending week higher ahead of Super Sunday

Euro rose further on Friday ahead of the Italian election and the German SPD coalition vote.
US Dollar ended on a weak tone after Trump’s announcement on tariffs.

Matías Salord FXStreet

EUR/USD is about to end the week trading above 1.2320, at the highest level in three days. The pair was able to recover after reaching the lowest level in six weeks on Thursday.

It bottomed at 1.2154 yesterday and started to recover after US President Trump said it would impose tariffs on steel and aluminum imports. The announcement was reinforced today with Trump mention to a “trade war”. The risk-off tone affected the greenback and it was positive for the euro.

The pair in a few hours erased weekly losses and rose on Friday above 1.2300. Near the end, it was hovering around 1.2325 (also the 20-day moving average), 30 pips above the level it closed last week. The up-move from 1.2150/55 improved the short-term technical outlook. If the euro rises further, the tone would favor further gains.

Key days ahead

The weekend presents risk events for the euro with the Italian election and the vote in Germany among SPD members on the coalition with CDU/CSU to form a government. The results of the votes are likely to impact on the euro since the beginning of the trading week.

After Sunday, the main event will the ECB meeting on Thursday. No change in monetary policy (rates and QE) is expected but most analysts see a change in its forward guidance, with a removal of the easing bias. A no change is likely to be negative for the euro.

In the US, the key economic report will be the February jobs report, “with most focus on average hourly earnings (AHE), where another strong monthly print would be likely to add to the reflation story”, said analysts from Danske Bank.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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