- EUR/USD is extending the positive momentum beyond the 1.19 mark.
- Spanish flash CPI came in flat MoM, Italian GDP contracted 12.8% QoQ.
- German advanced inflation figures coming up next in the docket.
EUR/USD is managing well to keep business above 1.19 the figure, retaking the bullish bias after an earlier knee-jerk to the 1.1885/80 band, or daily lows.
EUR/USD looks to data, risk appetite
EUR/USD is adding to Friday’s gains above 1.19 the figure, clinching at the same time fresh multi-day tops and resuming the upside on a weekly basis.
Monday’s opening in the European markets is seeing a positive/cautious tone among market participants after the private gauge of the Chinese manufacturing PMI (tracked by NBS) came in a tad lower for the month of August, although it remains within the expansion territory.
Data wise in the region, final GDP figures in Italy showed the economy contracted 12.8% QoQ during the April-June period and 17.7% on an annualized basis. Further data saw Spanish preliminary CPI expected to come in flat inter-month and to contract 0.5% from a year earlier.
Across the pond, the Dallas Fed manufacturing gauge is due seconded by speeches from FOMC’s R.Clarida (permanent voter, dovish) and Atlanta Fed R.Bostic (2021 voter, centrist).
What to look for around EUR
EUR/USD broke above the multi-day rangebound theme last week and managed to regain the 1.19 mark and above, where it is now attempting to consolidate. The July-August rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain in auspicious results from domestic fundamentals – which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – as well as US-China trade headlines. Also lending wings to the momentum around the euro appear the deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.
EUR/USD levels to watch
At the moment, the pair is up 0.11% at 1.1918 and a move above 1.1965 (2020 high Aug.18) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the other hand, the next support is located at 1.1772 (weekly low Aug.26) seconded by 1.1754 (weekly low Aug.21) and finally 1.1695 (monthly low Aug.3).
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