EUR/USD recovery hits resistance right below the 1.0885/95  area


 

  • EUR/USD’s rebound from 1.0766 finds resistance at 1.0875.
  • The euro regains lost ground although it remains weighed by concerns about ECB’s QE.
  • Below 1.0760, the EUR/USD might extend towards 1.0635 – Credit Suisse.

 

EUR/USD's rebound from 1.0766 lows on Thursday extended on Friday to intra-day highs at 1.0875, where the pair seems to have hit resistance before pulling back to 1.0850. The euro has turned back right ahead of a key resistance area, at 1.0885/95 where the pair was capped several times in April.

The euro remains weak on concerns about the ECB QE

The EUR/USD has been trimming losses today, buoyed by a somewhat brighter market sentiment with easing restrictions in the world’s major economies boosting hopes about a faster than expected economic recovery.  

The pair lost about 1.6% earlier this week after the German high court called the ECB to justify bonds purchases of its Quantitative Easing program. The German court ruling cast shadow about the future of the European Central Bank’s plan to support economic recovery from the COVID-19 shutdown, which has undermined investors’ confidence on the euro.

EUR/USD’s year-end target is 1.1000 – Deutsche Bank

FX analysts at Deutsche Bank have lowered the EUR/USD year-end target to 1.1000 amid the growing uncertainty in EU stability, “Questions around Europe’s systemic stability linger and newsflow on this front in recent weeks has been disappointing, including ECB reluctance to deploy OMT; the German Constitutional Court decision and delays in putting together a Recovery Fund (…) We flatten our EUR/USD forecast for this year, with a 1.10 year-end target.”

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