- EUR/USD is bouncing off daily lows and trades closer to 1.18.
- German flash CPI missed expectations for the month of July.
- US advanced GDP surprised to the upside in the second quarter.
After bottoming out in the 1.1730 region earlier in the session, EUR/USD is now attempting to regain the upper end of the range near the 1.1800 zone.
EUR/USD bid after US data
EUR/USD is trading on the defensive in the second half of the week amidst some mild recovery in the greenback and investors’ profit taking in light of recent +2-year highs just beyond 1.18 the figure.
In fact, the pair moved to levels last seen in May 2018 in response to the dovish view at the FOMC meeting on Wednesday, although the bull run lacked follow through and sparked the ongoing corrective move.
On Thursday’s docket, positive results from the German labour market contrasted with the lower-than-expected advanced inflation figures for the month of July. Across the pond, preliminary US GDP figures showed the economy is predicted to contract 32.9% during the April-June period, while Initial Claims bettered consensus and rose by more than 14 million during last week.
What to look for around EUR
EUR/USD recorded fresh tops just above the 1.18 yardstick on Wednesday, confirming once again the solid momentum around both the single currency and the rest of its risky peers. The sharp move up, while largely triggered by dollar-selling, has found extra sustain in auspicious results from the domestic docket, in turn supporting further the view of a strong economic recovery following the coronavirus fallout. Also lending wings to the momentum around the euro, the recently clinched deal on the European Recovery Fund helped putting political fears within the region to rest (for now), while the solid position of the current account in the region adds to the rally.
EUR/USD levels to watch
At the moment, the pair is losing 0.01% at 1.1790 and faces immediate contention at 1.1709 (38.2% Fibo of the 2017-2018 rally) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally). On the upside, a breakout of 1.1806 (2020 high Jul.29) would target 1.1815 (monthly high Sep.24 2018) en route to 1.1852 (monthly high Jun.14 2018).
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