Search ForexCrunch
  • The pair picks up extra pace and tests 1.1250.
  • Further upside comes in response to USD selling.
  • US CPI missed consensus during April.

The shared currency is prolonging the upside momentum at the end of the week and pushes EUR/USD to the area of weekly peaks around 1.1250.

EUR/USD up on weaker CPI

Spot gathered extra steam on Friday after US inflation figures noted once again that the absence of upside traction stays far from abated for the time being, despite Fed officials have reiterated on several occasions that this is only temporary.

In fact, consumer prices measured by the CPI rose at a monthly 0.3% and 2.0% on an annualized basis. Core prices gained 0.1% inter-month and 2.1% on a year to April.

In the meantime, the pair stays firm on its way to close the second consecutive week with gains after reaching fresh 2019 lows in the boundaries of 1.1100 the figure in late April.

What to look for around EUR

Recent data in Euroland and Germany allowed market participants to believe that some healing process could be under way in the region amidst the ongoing slowdown. However, this scenario needs confirmation in the next months, while the current ‘neutral/dovish’ stance from the ECB is expected to persist for the reminder of the year and probable H1 2020. The broad-based risk-appetite trends and USD-dynamics are posed to rule the sentiment surrounding the European currency for the time being, all in combination with the onoging US-China trade dispute and potential US tariffs on EU products. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections in late May, as the populist option in the form of the far-right and the far-left movements appears to keep swelling among voting countries.

EUR/USD levels to watch

At the moment, the pair is gaining 0.25% at 1.1241 and a break above 1.1264 (high May 1) would target 1.1262 (55-day SMA) en route to 1.1323 (high Apr.17). On the downside, immediate support aligns at 1.1135 (low May 3) seconded by 1.1109 (2019 low Apr.26) and finally 1.0839 (monthly low May 11 2017).