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  • EUR/USD adds to Wednesday’s gains beyond 1.18 the figure.
  • German final July CPI contracted 0.5% MoM and 0.1% YoY.
  • US Initial Claims will be the salient event later in the NA calendar.

The single currency is extending the upbeat mood into Thursday’s session and is lifting EUR/USD back above the key 1.1800 barrier, recording at the same time new multi-day tops.

EUR/USD looks to risk trends

EUR/USD is up for the third session in a row on Thursday, extending the rebound from weekly lows in the 1.1700 neighbourhood. It is worth recalling that in this contention area coincide monthly lows and a Fibo level (of the 2017-2018 rally).

In the meantime, investors remain focused on the US political arena, where there is now news regarding the debate between Democrats and Republicans of a new stimulus bill.

Also sustaining the resumption in the demand of the shared currency (and the rest of the risk-associated peers) appears the fresh set of positive results in Germany and the broader euro zone (Sentix Index on Monday, ZEW survey on Tuesday), all supporting the view of a “V”-shaped recovery following the lockdown measures earlier in the year.

Data wise in the euro bloc, Spanish CPI contracted 0.9% MoM and 0.6% on a yearly basis in July, while German consumer prices contracted 0.5% from a month earlier and 0.1% over the last twelve months.

Later in the US data space, the usual weekly report on the US labour market is due seconded by Import/Export Prices.

What to look for around EUR

EUR/USD pushed higher and recorded new highs near 1.1920 in the second half of last week, triggering a corrective move that met solid contention in the 1.17 region for the time being. 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. Also lending wings to the momentum around the euro appear the recently clinched 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 gaining 0.47% at 1.1839 and a breakout of 1.1916 (2020 high Aug.6) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the downside, immediate support is located at 1.1695 (monthly low Aug.3) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally).