- EUR/USD moves higher to the 1.0860 area on risk-on trade.
- The dollar’s sell-off forces DXY to retreat below 100.00.
- ECB, FOMC meeting next of relevance later this week.
The single currency is extending the upbeat momentum into Monday’s session and is lifting EUR/USD to the area of 3-days peaks around 1.0860.
EUR/USD focused on data, coronavirus
EUR/USD is advancing for the second consecutive session at the beginning of the week, managing to reclaim the mid-1.0800s after bottoming out more than a cent lower during the past week.
The improvement in the risk appetite trends is helping the pair in the upside amidst the continuation of the decreasing trend in deaths and infected cases of COVID-19 in the Old Continent. This in turn, is motivating affected countries to (somewhat) accelerate the re-opening of the economy, although always in a gradual and cautious fashion.
Later in the week, the focus of attention will be on the FOMC meeting (Wednesday) and the ECB event (Thursday). Extra key data will see flash inflation figures in Germany and the broader Euroland for the month of April, while advanced Q1 GDP figures, inflation measured by the PCE and the ISM Manufacturing are expected to take centre stage across the pond.
What to look for around EUR
The euro remains in recovery-mode so far on Monday, sustained by USD-weakness and a better mood in the risk-complex. As always, developments from the coronavirus and its impact on the economy are expected to keep ruling the sentiment in the global markets for the time being. On the more macro view, the single currency is expected to remain under scrutiny in the next periods in light of the forecasted contraction in the economy of the region in the first half of the year, relegating hopes of a strong recovery to Q3 and/or Q4.
EUR/USD levels to watch
At the moment, the pair is gaining 0.14% at 1.0837 and a breakout of 1.0859 (weekly high Apr.27) would target 1.0990 (weekly/monthly high Apr.15) en route to 1.1039 (200-day SMA). On the flip side, immediate contention is located at 1.0727 (weekly low Apr.24) followed by 1.0635 (2020 low Mar.23) and finally 1.0569 (monthly low Apr.10 2017).
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