- EUR/USD finally surpasses the key 1.2200 barrier on Tuesday.
- The sell-off in the dollar forces DXY to break below 90.00.
- EMU flash Q1 GDP figures next of relevance in the euro docket.
The buying pressure around the single currency remains well and sound for yet another session and lifts EUR/USD to fresh 3-month peaks beyond 1.2200 the figure on Tuesday.
EUR/USD stronger on USD-selling
EUR/USD advances for the fourth consecutive session on turnaround Tuesday, extending the recovery further north the key 1.2200 barrier for the first time since later February.
The selling pressure around the greenback keeps gathering traction despite the steady performance of US yields. Closer to home, yields of the German 10-year Bund navigate the upper end of the range around -0.10% and lend further legs to the pair’s rally.
Also supporting the bounce in spot appears the generalized better mood surrounding the risk-associated universe.
Later in the euro docket, another revision of the Q1 GDP figures in the broader Euroland will take centre stage. Across the pond, Housing Starts and Building Permits will be in the limelight along with the weekly report on US crude oil inventories by the API.
What to look for around EUR
EUR/USD finally breaks above the key 1.2200 hurdle amidst the continuation of the recovery from last week’s lows in the mid-1.2000s, always on the back of the strong bounce in yields of the German 10-year Bund and the generalized upbeat tone in the risk complex. The sustained rebound in the pair also comes in response to the investors’ shift to the improved growth outlook in the Old Continent now that the vaccine campaign appears to have gained some serious pace and solid results from key fundamentals pari passu with the surging morale in the bloc.
Key events in the euro area this week: Advanced EMU Q1 GDP (Tuesday) – Final EMU April CPI (Wednesday) – German/EMU flash May PMIs, advanced Consumer Confidence (Friday).
Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections.
EUR/USD levels to watch
So far, spot is gaining 0.58% at 1.2218 and faces the next hurdle at 1.2243 (monthly high Feb.25) followed by 1.2300 (round level) and finally 1.2349 (2021 high Jan.6). On the downside, a break below 1.1985 (monthly low May 5) would target 1.1955 (200-day SMA) en route to 1.1887 (61.8% Fibo of the November-January rally).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.