EUR/USD regains traction and advances to session tops around 1.18
- EUR/USD leaves behind the recent weakness and tests 1.1800.
- EMU Producer Prices coming up next in the euro docket.
- Factory Orders, IBD/TIPP next of relevance in the NA session.
The single currency appears recovered following the recent correction lower and is now pushing EUR/USD to the 1.1800 neighbourhood, or session tops, on Tuesday.
EUR/USD looks to data, risk appetite
The dollar is meeting some selling pressure and is therefore lending extra support to EUR/USD, helping the pair to regain ground lost after two consecutive sessions with losses.
EUR/USD came under pressure following last week’s +2-year tops just above 1.19 the figure. This selling mood was also exacerbated after spot moved well into overbought levels, as per the daily RSI, adding the technical component to the corrective downside.
In the meantime, the underlying bullish stance remains unchanged around the pair, always sustained by the broad-based bearish stance in the buck, the strong economic recovery expected in the euro area, firm hopes of a COVID-19 vaccine and the massive monetary stimulus running across the region.
Later in the Euroland, Producer Prices in the region are due while June’s Factory Orders and the IBD/TIPP index are expected across the pond.
What to look for around EUR
EUR/USD recorded fresh tops just above the 1.19 yardstick at the end of last week, 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 broad-based 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 gaining 0.20% at 1.1785 and a breakout of 1.1909 (2020 high Jul.31) 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 contention emerges at 1.1695 (weekly low Aug.3) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally).