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EUR/USD recedes from 2-month tops beyond 1.1150

EUR/USD recedes from 2-month tops beyond 1.1150

  • EUR/USD moves higher and tests the 1.1150 region on Monday.
  • Improved risk appetite trends, weaker dollar supports the upside.
  • German, EMU Manufacturing PMIS remained depressed in May.

The upside momentum in the single currency remains well and sound for yet another session on Monday and is pushing EUR/USD to fresh 2-month tops in the 1.1150 zone.

EUR/USD looks to risk trends, US data

The persistent weak tone surrounding the greenback is lifting EUR/USD to the area of fresh multi-week highs in the 1.1150 region at the beginning of the week.

In fact, the prevailing risk-on atmosphere continues to lend support to the exodus from the dollar in favour of riskier peers and therefore lifting the pair to levels last seen in late March in the mid-1.1100s.

In the meantime, investors continue to closely follow the increasing social unrest in the US along with progress of the re-opening of the economy on both shores of the Atlantic as well as developments from the US-China trade conflict.

 

In the docket, both German and EMU manufacturing PMIs came in a tad below the preliminary readings for the month of May. This outcome, however, was largely anticipated by market participants. In the NA session, the most salient publication will be the ISM Manufacturing seconded by the final Markit’s manufacturing PMI.

What to look for around EUR

EUR/USD is flirting with the key resistance area around 1.1150 at the beginning of the week. As usual, USD-dynamics and US-China trade effervescence keep driving the sentiment in the global markets, while the euro is deriving extra oxygen from the re-opening of economies in Europe and news of an aid package proposed by the European Commission. 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 0.31% at 1.1135 and a break above 1.1154 (weekly high Jun.1) 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 1.0894 (55-day SMA) and finally 1.0870 (weekly low May 26).

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