EUR/USD has been struggling within very narrow ranges for too long. Is the pair about to break out of the frustrating pair?
The move up actually began for a move to the downside: the initial reaction to the Fed decision. Yellen and her colleagues were very marginally more hawkish than expected. They offered a more upbeat view of the economy, basically acknowledging reality. EUR/USD slipped to 1.0960, exactly at support.
But regarding the rates, there were absolutely no hints of an upcoming hike. It seems that the FOMC will wait for after the US elections and for some more clarity on the impact of Brexit. So, the dollar turned south, and EUR/USD began rising back to the top of the range.
And the momentum continues with some positive data from Europe. Initial inflation data from the German states shows rising prices. Spain’s unemployment rate is still high, but better than expected: 20% instead of 20.5% predicted and 21% last time. Also in Germany, the number of unemployed dropped by 7K, better than 3K expected and also better than -6K seen last time.
EUR/USD continued advancing, reaching a high of 1.1119 and remains above 1.11. Are we seeing a breakout? Resistance awaits at 1.1190 and until that line is breached, it is hard to call this a big move, but only a move up within the range.
More: EUR/USD to 1.06 by end September – CIBC
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