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EUR/USD climbs to 2-month tops beyond 1.1100

EUR/USD climbs to 2-month tops beyond 1.1100

  • EUR/USD clinches multi-week highs above the 1.1100 mark.
  • Dollar debilitates further ahead of Trump’s presser on China.
  • German Retail Sales contracted less than expected in April.

The upside momentum in the shared currency remains everything but abated on Friday and is now lifting EUR/USD to fresh tops in levels beyond 1.1100 the figure.
 

EUR/USD boosted by USD-weakness

EUR/USD is navigating the 1.1115/20 band, area last visited in late March, and at shouting distance from the key resistance zone in the mid-1.1100s.

The continuous offered bias surrounding the greenback is intensifying the upside in the pair on the back of usual month-end flows and heightened cautiousness on the upcoming press conference by President Trump. Indeed, China is expected to take centre stage in Trump’s presser later on Friday, with trade and the security law to be implemented in Hong Kong on top of the agenda.

In the docket, German Retail Sales contracted at a monthly 5.3% during April, French advanced CPI is seen flat during May while the economy contracted 5.3% in the January-March period, bettering a tad the preliminary reading. In the broader euro area, first estimates of the CPI showed consumer prices are expected to rise 0.1% YoY and to 0.9% YoY when comes to the Core print. Italian inflation, in the meantime, is forecasted to contract 0.1% inter-month.
 

Across the pond, the focus of attention will be on inflation figures tracked by the PCE, advanced Trade Balance results for the month of April, Personal Income/Spending and the final print of the U-Mich index.

What to look for around EUR

EUR/USD has finally managed to reclaim the 1.1100 barrier and above and it has now shifted its target to the 1.1150 region. In the meantime, USD-dynamics and US-China trade effervescence keep driving the sentiment in the global markets. On the domestic scenario, the euro is deriving extra oxygen from news of an aid package proposed by the European Commission as well as progress on the re-opening of economies in the Old Continent. Further legs for the pair can be found in the solid position of the euro area’s current account.

EUR/USD levels to watch

At the moment, the pair is advancing 0.37% at 1.1117 and a break above 1.1147 (weekly high Mar.27) would target 1.1186 (61.8% Fibo of the 2017-2018 rally) en route to 1.1239 (monthly high Dec.31 2019). On the other hand, immediate contention emerges at 1.1010 (200-day SMA) followed by 1.0895 (55-day SMA) and finally 1.0870 (weekly low May 26).

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