- EUR/USD extends the upside to the 1.0970 region on Friday.
- Markets in Europe are closed due to the Labour Day holiday.
- US ISM Manufacturing, Markit’s PMI next on tap in the docket.
The shared currency is prolonging the upside momentum at the end of the week and is pushing EUR/USD to the upper end of the weekly range around 1.0970.
EUR/USD bolstered by USD-selling
EUR/USD is advancing for the third consecutive session so far this week, regaining extra pace in response to increased dollar-selling due to month-end flows.
On the domestic front, the ECB matched estimates and left key interest rates on hold at its meeting on Thursday. In addition, there were no changes to the current PEPP and APP programmes, while it reduced the rate of the TLTRO by 25 bps. However, the central bank stressed it remains ready to act in case of need.
No data releases scheduled in the euro region on Friday, whereas the ISM Manufacturing will be the salient event across the pond, seconded by Markit’s final PMI for the month of April.
What to look for around EUR
The euro extends the recovery and is gradually approaching the psychological mark at 1.1000 the figure, always propped up by the selling bias in the dollar while positive headlines from the coronavirus have also helped. In the meantime, recent sharp contractions in GDP figures of Spain, France and the broader Euroland have started to reflect the impact of the COVID-19 pandemic on the economy, showing that a recession in the bloc is almost unavoidable, at least in the first half of the year.
EUR/USD levels to watch
At the moment, the pair is gaining 0.06% at 1.0958 and a break above 1.0972 (weekly high Apr.30) would target 1.0990 (weekly/monthly high Apr.15) en route to 1.1034 (200-day SMA). On the flip side, immediate contention is located at 1.0814 (78.6% Fibo of the 2017-2018 rally) seconded by 1.0727 (weekly low Apr.24) and finally 1.0635 (2020 low Mar.23).
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