Search ForexCrunch
  • EUR/USD adds to Friday’s gains near 1.1150.
  • Attention stays on US-China trade concerns.
  • German IFO, US Durable Goods Orders next of relevance.

The buying interest around the single currency remains well and sound so far on Monday and is now lifting EUR/USD to fresh 2-week highs near 1.1150.

EUR/USD looks to trade, yields

The pair is adding to Friday’s gains and looking to consolidate the recent breakout of the key barrier at 1.1100 the figure, always on the back of increasing trade tensions between the US and China and despite some recovery in the buck.

The upside momentum in spot is also bolstered by declining US yields, which have dragged the 10-year yield spread differential vs. German Bunds to the 213 pts area, levels last seen in February 2018.

Extra support for the pair can be found following the speech by Chief J.Powell at the Jackson Hole Symposium, where he hinted at the likeliness that further easing (via interest rate cuts) could be in the pipeline in the next months.

Later in the session, the German IFO will be the salient event ahead of the release of US Durable Goods Orders and regional manufacturing gauges across the pond.

What to look for around EUR

The pair charted a bullish ‘outside day’ last Friday and today’s price action should be key in assessing the potential for further recovery in the next days. In the meantime, US-China trade jitters continue to drive the sentiment in the global markets, while expectations of ECB easing and Italian politics warns against the sustainability of occasional bullish attempts, all amidst the unremitting deterioration of the economic outlook in the region.

EUR/USD levels to watch

At the moment, the pair is advancing 0.11% at 1.1149 and a breakout of 1.1186 (61.8% Fibo of the 2017-2018 up move) would target 1.1212 (55-day SMA) en route to 1.1282 (high Jul.19). On the flip side, immediate contention emerges at 1.1113 (10-day SMA) followed by 1.1051 (low Aug.23) and finally 1.1026 (2019 low Aug.1).