- Spot moves higher on the better risk sentiment.
- DXY flirts with weekly lows near 96.80.
- EMU Industrial Production surprised to the upside in February.
The continuation of the risk-on mood in the global markets is lending extra support to the shared currency and has motivated EUR/USD to break above the key barrier at 1.1300 the figure.
EUR/USD now focused on the 200-week SMA
Following a strong pick up in the markets’ appetite for riskier assets in past sessions, the pair is on its way to close the first week with gains after three consecutive weekly pullbacks, including a test of the 1.1180 region.
In fact, market participants seems to have already digested the recent dovish message from the ECB and the FOMC minutes, while the absence of significant headlines in the US-China-EU trade front and Brexit talks also contribute to the upbeat mood.
In the data space, Industrial Production in the euro bloc contracted 0.2% MoM in February and 0.3% over the last twelve months, both readings surpassing forecasts.
What to look for around EUR
Positive sentiment in the risk-associated complex continues to support the shared currency amidst a persistent down move in the greenback. The ECB reiterated the risks to the economic outlook in the region remains tilted to the downside, a view reinforced by poor results from fundamentals in past weeks. That said, the ‘patient-for-longer’ stance from the ECB could be among us for longer than expected. Against this backdrop, the neutral stance from the Fed and occasional deterioration in the risk-on mood should lend support to the buck and thus limit the upside in spot. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections and the swelling presence of the populist movement among the voting countries.
EUR/USD levels to watch
At the moment, the pair is gaining 0.58% at 1.1317 and a breakout of 1.1338 (200-week SMA) would target 1.1346 (100-day SMA) en route to 1.1399 (6-month resistance line). On the downside, immediate support emerges at 1.1241 (10-day SMA) seconded by 1.1183 (low Apr.2) and finally 1.1176 (low Mar.7).
Share
