- EUR/USD remains on track to close in the positive territory.
- US Dollar Index stays below 90.00 during American session.
- Focus shifts to GDP data and IFO survey from Germany.
After spending the majority of the day in a relatively tight range below 1.2200, the EUR/USD pair gained traction during the American trading hours and reached a daily high of 1.2230 before going into a consolidation phase. As of writing, the pair was up 0.3% on the day at 1.2215.
The renewed USD weakness in the second half of the day seems to be helping EUR/USD push higher. In the absence of significant fundamental drivers, risk perception continues to impact the greenback’s performance against its rivals. With Wall Street’s main indexes opening sharply higher, the US Dollar Index edged lower and was last seen losing 0.15% at 89.88. Meanwhile, the S&P 500 and the Nasdaq Composite indexes were up 1.1% and 1.75%, respectively.
The only data from the US revealed on Monday that the Chicago Fed National Activity Index dropped to 0.24 in April from 1.71.
On Tuesday, the first-quarter Gross Domestic Product (GDP) data from Germany will be looked upon for fresh impetus. Investors expect the German economy to contract by 3% on a yearly basis. Additionally, the IFO monthly survey’s Business Climate, Expectations and Current Assessment components will be released as well.
EUR/USD technical outlook
Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, thinks that EUR/USD could target the 2021 high of 1.2349 if it manages to clear 1.2243.
“Our longer-term target is 1.2556/1.2619, the 2018 high, the 200-month moving average and the 55-quarter MA,” Jones added. “Below the uptrend, we would allow for some slippage to the 1.1994/86 band of support (mid-March highs and the 22nd April low). Key support is 1.1865 (2020-2021 uptrend).”
Additional levels to watch for
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