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Mazen Issa, Senior FX Strategist at TD Securities, warn that the EUR/USD pair is approaching a key resistance level. He sees some similarities between the current rally and the one it took place during mid-2017. 

Key Quotes: 

“EURUSD’s ascent may be reminiscent of the mid-2017 melt-up before peaking around 1.25. While some say that history doesn’t repeat itself, it sure does rhyme. At that time, Euroscepticism was high ahead of the French elections. Macron’s victory offered another lifeline to the EU project, however. We may now be in a similar situation. EURUSD’s lift-off comes on the heels of the EU Recovery Fund (ERF) proposal in May. Some think this puts it one step closer to a fiscal union.”

“EURUSD’s ascent since the ERF has been relentless. We are wary as the pair nears multi-year daily downtrend resistance ~1.18+. We see this as a litmus test over the durability of EURUSD’s surge, and where skewed tactical positioning and valuations (on our dashboard) begin to bite.”