- EUR/USD trades with decent gains in the 1.1830/40 band.
- All the attention is on the ECB monetary policy meeting later on Thursday.
- US Initial Claims, Producer Prices in the limelight in the NA session.
The upside momentum remains well and sound around the single currency and is now helping EUR/USD to climb to daily highs in the 1.1840 region.
EUR/USD focused on ECB
EUR/USD is up for the second session in a row on Thursday, reversing the recent multi-session decline after auspicious comments from ECB officials on Wednesday motivated buyers to return to the market.
In fact, ECB officials talked down the likeliness of extra monetary stimulus in the region in light of the ongoing economic recovery. These comments came in stark contrast to those made by ECB’s P.Lane last week, when he hinted at the idea that a strong exchange rate could play against the pick-up in the activity – thus triggering the corrective downside in spot.
Earlier in the calendar, Italian Industrial Production expanded at a monthly 7.4% during July and contracted 8.0% from a year earlier.
Across the pond, the usual weekly report on the US labour market will take centre stage along with Producer Prices for the month of August and the EIA’s report on crude oil supplies.
What to look for around EUR
EUR/USD managed to test the area just above 1.20 the figure at the beginning of the month. However, bulls failed to extend the rally further north, sparking a leg lower to the sub-1.18 instead. Looking at the broader picture, the bearish view on the dollar continues to sustain the underlying constructive bias in the pair, all accompanied by the improved sentiment in the risk-associated universe, auspicious results from domestic fundamentals – which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – as well as a calmer US-China trade front. The solid positive stance in the speculative community also underpins the constructive outlook in the euro.
EUR/USD levels to watch
At the moment, the pair is gaining 0.26% at 1.1833 and a breakout of 1.2011 (2020 high Sep.1) would target 1.2032 (23.6% Fibo of the 2017-2018 rally) en route to 1.2413 (monthly high Apr.17 2018). On the flip side, immediate contention is located at 1.1751 (monthly low Sep.9) seconded by 1.1709 (38.2% Fibo of the 2017-2018 rally) and finally 1.1695 (monthly low Aug.3).
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