- EUR/USD quickly clinches fresh daily highs in the 1.1820 region.
- Positive comments from ECB officials give legs to the euro.
- The ECB event takes centre stage later in the week.
EUR/USD has now regained the 1.1800 mark and above, reversing at the same time six consecutive sessions with losses.
EUR/USD now looks to the ECB
The 6-session negative streak in EUR/USD looks over so far on Wednesday, as the pair manages to bounce off multi-week lows in the mid-1.1700s in response to auspicious comments from ECB officials.
In fact, some ECB’s Board members suggested that extra monetary stimulus would be unnecessary in light of the ongoing economic recovery in the region. Those comments came somewhat against the consensus bias towards a dovish message from the central bank at Thursday’s event.
Nothing worth mentioning in the euro calendar, whereas JOLTs Job Openings and the weekly report on US crude oil stockpiles by the API are only scheduled across the pond.
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 zone so far instead. In 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 US-China positive headlines. Also lending wings to the momentum around the euro appear the deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.
EUR/USD levels to watch
At the moment, the pair is gaining 0.32% at 1.1811 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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