EUR/USD pushes higher to daily highs around 1.1840
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EUR/USD pushes higher to daily highs around 1.1840

  • EUR/USD trades in new 2-week peaks near 1.1840.
  • The dollar deflates in response to lower US yields.
  • EMU’s jobless rate stayed unchanged at 8.3% in February.

The buying interest around the European currency remains well and sound in the first half of the week and now lifts EUR/USD to fresh 2-week highs in the 1.1830/35 band.

EUR/USD in multi-day highs

EUR/USD adds to Monday’s optimism and looks to consolidate the recent breakout of the key barrier at 1.18 the figure.

The continuation of the recovery in the pair comes amidst the corrective downside in US yields, which has in turn morphed into further selling pressure around the dollar. In fact, yields of the US 10-year note breach the 1.70% level and challenge the area of daily lows.

Earlier results in Euroland showed the Investor Confidence measured by the Sentix index improved to 13.1 for the month of April, while the Unemployment Rate came in at 8.3% in February, missing forecasts.

Data across the pond include the IBD/TIPP Index, JOLTs Job Openings and the weekly report on crude oil supplies by the API.

What to look for around EUR

EUR/USD met some decent resistance in the vicinity of 1.1820 in the first half of the week. The strong pullback in the pair seen as of late came along the persistent bid bias in the greenback, which has been undermining the constructive view in the pair in the past weeks. The deterioration of the morale in Euroland coupled with the poor pace of the vaccine rollout in the region vs. the solid performance of the US economy have all been collaborating with the renewed offered stance around the single currency. However, the steady hand from the ECB (despite some verbal concerns) in combination with the expected rebound of the economic activity in the region in the post-pandemic stage is likely to prevent a much deeper pullback in the pair in the longer run.

Key events in the euro area this week: ECB Accounts (Thursday).

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund.

EUR/USD levels to watch

At the moment, the index is gaining 0.23% at 1.1838 and faces the next hurdle at 1.1875 (200-day SMA) followed by 1.1989 (weekly high Mar.11) and finally 1.2000 (psychological level). On the downside, a breach of 1.1704 (2021 low Mar.31) would target 1.1602 (monthly low Nov.4) en route to 1.1573 (2008-2021 support line).

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