The bid tone around the single currency stays on the rise in the second half of the week, now lifting EUR/USD to fresh YTD tops in the 1.1430 region.
EUR/USD attention to EMU/German CPI
The rally in spot remains well and sound so far today, advancing since Tuesday and gaining more than 2% since Monday’s lows in the 1.1170 region.
Recent hawkish comments by President Draghi at the ECB Forum boosted the demand for EUR, while markets paid no attention to yesterday’s efforts from the central bank to try to talk down those remarks.
The pair has quickly moved through the critical 1.1300 barrier earlier in the week, allowing the possibility of a visit to 2016 tops in 1.1616 seen in early May in case the bullish impulse keeps its current pace. The recent performance of the EUR futures markets seems to reinforce the case for further upside in the near term.
The bullish crossover in the daily MACD is also giving extra support to the pair’s upside, although the RSI (14) is flirting with overbought levels, prompting some caution ahead.
On the USD-side, the greenback continues to suffer the fresh hawkish tone from G10 central banks, dragging the US Dollar Index to levels last traded in early October 2016 in the mid-95.00s.
On the data front in Euroland, advanced inflation figures in the euro area and Germany for the current month will be the salient points in Europe, while the final print for Q1 GDP and the usual weekly report on the labour market are due in the US docket ahead of the speech by St. Louis Fed J.Bullard (2019 voter, centrist).
EUR/USD levels to watch
At the moment, the pair is gaining 0.42% at 1.1426 facing the next up barrier at 1.1434 (high Jun.24 2016) seconded by 1.1466 (high Apr.12 2016) and finally 1.1616 (high May 3 2016). On the other hand, a break below 1.1292 (low Jun.28) would open the door to 1.1232 (10-day sma) and then 1.1117 (low Jun.20).