EUR/USD surges through 1.21 mark on German coalition talks breakthrough

Haresh Menghani FXStreet

The EUR/USD pair built on previous session's strong up-move and spiked to the 1.2100 handle for the first time December 2014.

The pair finally managed to break through 2017 highs resistance near the 1.2090 region and the latest leg of upsurge was led by news that German party leaders have reached a breakthrough in coalition talks.

Against the backdrop of yesterday's perceived hawkish ECB monetary policy meeting minutes, a positive political development provided an additional boost to the shared currency and remained supportive of the strong up-move.

As details of the coalition agreement continue to emerge, the pair continued scaling higher and now seems to have taken along some big stops placed at the 1.2100 handle. Hence, it would be prudent to wait for a follow-through buying interest to confirm if the break out is for real or is solely led by short-covering.

• Key details of coalition agreement reached between the German party leaders

Later during the early NA session, the US economic docket, featuring the release of latest inflation figures and monthly retail sales data, would now be looked upon for some immediate respite for the US Dollar bulls and provide some short-term trading opportunities.

Technical levels to watch

The break-out momentum seems strong enough to continue boosting the pair further towards its next resistance near the 1.2165 region en-route the 1.2200 handle.

On the flip side, the 1.2100-1.2090 region now turns an immediate support to defend, which if broken could drag the pair back towards 1.2030 intermediate support ahead of the key 1.20 psychological mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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