- EUR/USD moves higher and surpasses the 1.1300 mark.
- The dollar remains offered on solid risk-on sentiment.
- US ISM Non-Manufacturing, Markit’s Services PMI next of note.
Euro-bulls keep pushing higher at the beginning of the week, lifting EUR/USD to fresh multi-day highs in the 1.1330 region.
EUR/USD up on USD-selling, looks to data
Optimism in the risk complex keeps running high on Monday, motivating EUR/USD to extend Friday’s gains well past the 1.1300 yardstick and opening at the same time the door to a potential test of mid-June peaks in the mid-1.1300s.
In fact, positive results from key fundamentals in both the US and Europe have coupled with rising hopes of a “V”-shaped recovery, all putting the buck under extra selling pressure and thus allowing the current strong bounce in the pair and its risk-peers.
In the docket, German Factory Orders showed a sharp rebound in May, while Retail Sales in the broader euro area surprised to the upside. In the same line, the Sentix Index – which tracks the investor confidence – rebounded further in July, albeit below consensus.
In the US, the services sector will be in centre stage in light of the releases of the final Services PMI by Markit and the more relevant ISM Non-Manufacturing.
What to look for around EUR
EUR/USD’s advance appears propped up by the better mood in the global markets, in turn sustained by optimism around the ongoing recovery post-pandemic. The constructive view in the euro, in the meantime, stays well and sound and supported by the improvement of key fundamentals in the region amidst the current (and massive) monetary stimulus by central banks. On top, the solid performance of the region’s current account is also adding to the attractiveness of the shared currency.
EUR/USD levels to watch
At the moment, the pair is gaining 0.77% at 1.1330 and a break above 1.1348 (weekly high Jun.23) would target 1.1422 (monthly high Jun.10) en route to 1.1495 (2020 high Mar.9). On the other hand, immediate contention emerges at 1.1168 (monthly low Jun.19) seconded by 1.1147 (high Mar.27) and finally 1.1039 (200-day SMA).
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