Search ForexCrunch
  • EUR/USD clinched monthly tops near 1.1140, receded afterwards.
  • The recent Brexit deal sustained the up move to 2-month highs.
  • US Philly Fed index dropped to 5.6 in October.

In spite of the correction lower from recent 2-moth highs, EUR/USD keeps the bid stance unchanged above the recently surpassed 1.11 handle.

EUR/USD boosted by Brexit deal, USD weakness

The rally in the pair remains well and sound for yet another session, this time it managed to advanced to fresh multi-week highs near 1.1140, where sits the 100-day SMA and some resistance emerged.

The continuation of the selling bias in the Greenback stands as the almost exclusive reason behind the sharp nearly-3-cent rebound in spot from 2019 lows in the 1.0880 region recorded on October 1st.  

In addition, spot gathered extra pace after the EU and the UK reached a Brexit deal earlier today, all amidst an improved mood in the risk-complex.

In the docket, the always-relevant Philly Fed index came in below estimates at 5.6 for the current month, while Building Permits surprised to the upside and Housing Starts disappointed expectations in September.

What to look for around EUR

The upside momentum in the pair has extended further north of the critical 1.1100 handle today against the backdrop of a weaker buck and optimism from the recently clinched Brexit deal. Despite the positive 3-week streak in spot has been sponsored by the persistent offered bias in the Dollar, the outlook in Euroland continues to deteriorate and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the longer run. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh further on EUR.

EUR/USD levels to watch

At the moment, the pair is gaining 0.46% at 1.1122 and faces the next barrier at 1.1139 (monthly high Oct.17) seconded by 1.1163 (high Aug.26) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the flip side, a break below 1.1049 (21-day SMA) would target 1.0988 (21-day SMA) en route to 1.0879 (2019 low Oct.1).