- The pair advanced to fresh tops on the back of ECB story.
- The greenback loses momentum near the 93.60 region.
- Hawkish ECB-speak boosted the demand for the single currency.
The European currency is extending its upside momentum this week and is now lifting EUR/USD to the upper end of the range in the 1.1760/70 band.
EUR/USD up on firm ECB
Spot gathered extra steam after ECB officials hinted at the likelihood that the normalization of the monetary policy in the region still remains on the cards for the European Central Bank.
In fact, this story is backed by earlier comments by BuBa’s J.Weidmann, who said that market expectations of an end of QE by end of 2018 are ‘plausible’. In addition, P.Praet said that the end of the bond-buying programme will be on the table for discussion next week, while ECB’s Hansson added that higher rates in Euroland are possible by mid-2019.
Furthermore, money markets in the euro area have almost fully priced in a rate hike from the ECB in July 2019. Probability of higher rates in June has climbed to 70%.
In the meantime, spot has receded to the mid-1.1700s after clinching fresh multi-day tops in the proximity of 1.1770 earlier in the day.
EUR/USD levels to watch
At the moment, the pair is gaining 0.25% at 1.1742 facing the next up barrier at 1.1770 (high Jun.6) seconded by 1.1754 (21-day sma) en route to 1.1830 (high May 22). On the downside, a break below 1.1617 (low Jun.1) would target 1.1511 (2018 low May 29) en route to 1.1479 (low Jul.20 2017).
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