EUR/USD stays bid and looks to retest the 1.1600 mark

EUR/USD comes under some pressure following 2020 tops.
The 1.16 emerges as a tough barrier in the very near-term.
EMU’s Consumer Confidence, US Claims next of relevance.

Pablo Piovano FXStreet

The buying bias surrounding the single currency remains well and sound for yet another session on Thursday, lifting EUR/USD to fresh tops in the 1.1600 neighbourhood.

EUR/USD meets resistance around 1.1600

After briefly trespassing the 1.16 yardstick on Wednesday, EUR/USD sparked a knee-jerk to the 1.1580 region, where it is now trying to consolidate. It is worth recalling that these levels were last seen in October 2018.

As usual in past weeks, the persistent bearish view in the dollar remains the exclusive catalyst of the pair’s rally from mid-June’s lows in the 1.1165/70 band to Wednesday’s peaks just beyond 1.16 the figure, gaining nearly 4% in five weeks.

Later in the euro docket, the European Commission will release the flash reading of the Consumer Confidence for the current month, while Initial Claims are expected to grab all the attention in the US calendar.

What to look for around EUR

EUR/USD recorded fresh 2020 highs just beyond the 1.16 level, always on the back of the persistent weakness surrounding the dollar. As always, upbeat risk appetite trends continue to support the momentum around the euro in combination with the ongoing gradual economic recovery in the euro bloc. Also lending wings to the momentum around the euro, the recently clinched deal on the European Recovery Fund helped putting political fears within the region to rest (for now).

EUR/USD levels to watch

At the moment, the pair is gaining 0.17% at 1.1589 and a breakout of 1.1601 (2020 high Jul.22) would target 1.1624 (monthly high Oct.1 2018) en route to 1.1815 (monthly high Sep.24 2018). On the downside, the next support aligns at 1.1495 (monthly high Mar.9_) seconded by 1.1448 (50% Fibo of the 2017-2018 rally) and finally 1.1422 (monthly high Jun.10).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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