- EUR/USD clinches fresh daily highs near 1.1340.
- The dollar sheds ground following Thursday’s strong gains.
- Industrial Production in Euroland contracted 17.1% in April.
EUR/USD has resumed the upside at the end of the week, managing to reclaim the 1.1340 region, or daily highs, at the time of writing.
EUR/USD bid on USD-selling
EUR/USD receded to the sub-1.1300 area on Thursday following a wave of risk aversion that triggered a demand for the safe haven universe.
Indeed, renewed and strong concerns over a potential second wave of coronavirus contagion fuelled fears among investors, sparking a fresh exodus to the buck and the rest of the safer assets on Thursday. The sour sentiment was sustained further by the poor prospects for the US economy by the Fed at the FOMC event on Wednesday.
In the docket, French CPI rose 0.1% MoM in May and Spanish consumer prices came in flat during the same period. In the broader euro area, the Industrial production contracted at a monthly 17.1%, less than expected.
Across the pond, Export/Import Prices are due ahead of the preliminary print of the Consumer Sentient tracked by the U-Mich index.
What to look for around EUR
EUR/USD has regained poise after weekly lows in the 1.1250 region recorded on Tuesday. The constructive view in the euro, however, remains well sustained by the gradual and relentless re-opening of economies in Europe and by the ongoing monetary stimulus announced by the ECB, Germany and the European Commission. 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 0.22% at 1.1323 and a breakout of 1.1422 (weekly/monthly high Jun.10) would target 1.1448 (50% Fibo of the 2017-2018 rally) en route to 1.1495 (2020 high Mar.9). On the other hand, the next support aligns at 1.1241 (weekly low Jun.9) seconded by 1.1186 (61.8% Fibo of the 2017-2018 rally) and finally 1.1021 (200-day SMA).
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