- EUR/USD has briefly tested the key 1.19 barrier.
- Economic Sentiment in Germany, Euroland came in better than expected.
- US Empire State index surprised to the upside in September.
The buying interest around the shared currency remains well and sound on Tuesday and is now helping EUR/USD to return to the 1.19 neighbourhood.
EUR/USD stronger on USD-weakness
EUR/USD is consolidating the bounce off last week’s lows in the mid-1.1700s and is already flirting with the key barrier at 1.19 the figure amidst a 5-day positive streak.
As usual, the shift in investors’ sentiment towards the euro – particularly after the ECB event on Thursday – and the return of the offered bias to the greenback have been sustaining the rebound in the pair.
In addition, encouraging results from September’s Economic Sentiment in both Germany and the broader Euroland also lent wings to the pair’s march north.
Data wise in the US calendar, Export Prices rose 0.5% MoM in August and Import Prices rose 0.9% MoM. Further data saw the NY Empire State index rising to 17.00 for the current month, also bettering expectations.
Later in the session, Industrial/Manufacturing Production are due along with Capacity Utilization figures and the API’s weekly report on crude inventories.
What to look for around EUR
EUR/USD managed to test the area just above 1.20 the figure at the beginning of the month. The move, however, lacked follow through and triggered a corrective downside that met contention near 1.1750. Looking at the broader picture, the bearish view on the dollar continues to sustain the underlying constructive bias in the pair, all accompanied by the improved sentiment in the risk-associated universe, auspicious results from domestic fundamentals - which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – as well as a calmer US-China trade front. The solid positive stance in the speculative community also underpins the constructive outlook in the euro, while the latest message from the ECB also collaborates with the momentum in the euro.
EUR/USD levels to watch
At the moment, the pair is gaining 0.19% at 1.1885 and a breakout of 1.1965 (monthly high Aug.18) would target 1.2011 (2020 high Sep.1) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the flip side, immediate contention is located at 1.1752 (monthly low Sep.9) seconded by 1.1709 (38.2% Fibo of the 2017-2018 rally) and finally 1.1695 (monthly low Aug.3).
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