EUR/USD advances to weekly highs near 1.1050

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  • EUR/USD moves higher on dollar weakness.
  • US advanced Retail Sales expanded 0.3% MoM.
  • US Industrial Production contracted 0.8% inter-month.

EUR/USD keeps pushing higher and extends the recovery to the 1.1050 region on the back of increasing selling pressure hitting the greenback.

EUR/USD tests the key 55-day SMA

The pair has accelerated the upside on Friday and is now printing new weekly highs in the 1.1050 region, where coincide the 10-day and 55-day SMAs. A clear breakout of this hurdle should reassert the upside pressure in spot.

Extra upside in the second half of the week came in pari passu with the deteriorating outlook on the dollar follwing renewed trade jitters, mixed data and declining yields.

Indeed, the US docket showed upbeat results from October’s Retail Sales, although the Empire State Manufacturing Index, Industrial/Manufacturing Production and Capacity Utilization all came in short of expectations.

Earlier in Euroland, final October headline inflation figures tracked by the CPI matched the preliminary readings at 0.1% MoM and 0.7% YoY.

What to look for around EUR

The euro has managed to reverse the pessimism seen in the first half of the week and motivated the pair to rebound from weekly lows in the 1.0990 region. Rising trade jitters and mixed data sparked a moderate correction lower in US yields, impacting on the sentiment around the dollar and thus forcing DXY to give away initial weekly gains. On the macro view, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least.

EUR/USD levels to watch

At the moment, the pair is gaining 0.19% at 1.1041 and faces the next up barrier at 1.1045 (high Nov.15) followed by 1.1095 (100-day SMA) and finally 1.1179 (monthly high Oct.21). On the downside, a breach of 1.0989 (monthly low Nov.14) would target 1.0925 (low Sep.3) en route to 1.0879 (2019 low Oct.1).

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