The euro is on a roll and it is now rising on its own. This isn’t a ride on dollar weakness anymore.
A long overdue squeeze of euro shorts? A material shift in direction as German bunds are sold off? If this the big change we were expecting for after the US rate hike or only a significant correction within the wider downtrend?
EUR/USD surge
The big boost higher came from the poor US GDP report. That sent EUR/USD above the critical 1.1050 line.
The rise in EUR/USD was accompanied by similar gains of other currencies against the troubled US dollar. But when the greenback made a comeback on some better news, the euro didn’t care too much. Other currencies retreated against the USD but the euro kept the party going.
Case in point: EUR/GBP is higher at 0.7312, EUR/JPY is surging towards 135 and EUR/CHF is around 1.05.
At the time of writing, the pair is testing new highs at 1.1265 and doesn’t seem to take a break, despite most of Europe enjoying the May 1st holiday.
EUR/USD – correction or course change?
Regarding the question at the beginning, it seems the pair has more room on the upside, but 1.15 could be a limit. May is usually a bad month for the pair.
More: What’s Next For USD Correction? How To Trade EUR/USD? – Morgan Stanley
Here is how it looks on the chart:
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