EUR/USD extended the three-day winning streak in Asia to a high of 1.1115; its highest level since November 9.
Is Eurozone a safe haven?
The Eurozone is increasingly looking like a new safe haven for the investors, courtesy of Macron’s victory in the French Presidential election and heightened odds of Chancellor Merkel winning the German elections later this year.
The timing could not have been better for the EUR bulls, given the investors are losing the faith in the Trump Presidency. Moreover, the political scene in the US is deteriorating every other day. The Comey memo scandal is the latest of the many that have made the White House a hot mess.
On the economic front, the Eurozone is looking equally strong if not better than the US. The data released yesterday showed the Eurozone economy expanded 0.5% q/q in the first quarter. The German economy surged 0.6% q/q or 2.4% in annualised terms, which is well above the US GDP.
The point worth noting is the both hard data and soft data in the Eurozone continues to shine, while in the US it is only the soft data that is holding up well.
European stock funds attract near-record cash - Lipper
US based stock funds that invest in Europe are witnessing record inflows. Reuters Lipper data released last Thursday showed “the European stock funds in the United States collected $1.7 billion in the week ended May 10”.
The US data (retail sales, inflation) released over the last one week were relatively weak. Meanwhile, the political scene has only worsened. Hence, the European stock funds are more likely to have witnessed a further rise in inflows this week.
No wonder, the EUR is on the tear and may continue to scale fresh multi month highs if the US political scene in the US worsens.
EUR/USD Technical Levels
The daily RSI is overbought, while the weekly RSI is sloping upwards and is well short of the overbought territory. EUR bulls need to be cautious in the short-run, although weekly RSI suggests the doors remain open for fresh multi-month highs.
The immediate resistance is seen at 1.1123 (Aug, Sep 2016 low). A daily close above the same would expose 1.1202 (23.6% Fib retracement of May 2014 high - Jan 2017 low) and 1.1299 (Nov 2016 high).
On the lower side, major support is seen at 1.10 (zero figure). A break lower would signal a short-term top has been made and could yield 1.0951 (last month’s high) and 1.0853 (monthly 10-MA).
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 climbs above 1.0500 on persistent USD weakness
EUR/USD preserves its bullish momentum and trades above 1.0500 on Monday. In the absence of high-impact data releases, the risk-positive market atmosphere makes it difficult for the US Dollar (USD) to find demand and helps the pair push higher.
GBP/USD rises to 1.2600 area as mood improves
Following a short-lasting correction, GBP/USD regains its traction and trades at around 1.2600. The US Dollar struggles to stay resilient against its rivals as market mood improves on Monday, allowing the pair to build on its bullish weekly opening.
Gold slumps below $2,650 despite falling US yields
After recovering toward $2,700 during the European trading hours, Gold reversed its direction and dropped below $2,650. Despite falling US Treasury bond yields, easing geopolitical tensions don't allow XAU/USD to find a foothold.
Five fundamentals for the week: Fed minutes may cool Bessent boost, jobless claims, core PCE eyed Premium
Will the rally around Scott Bessent's nomination continue? The short Thanksgiving week features a busy Wednesday packed with events, and the central bank may cool the enthusiasm.
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.