EUR/USD leaps to session tops beyond 1.1030
- EUR/USD pushes higher on USD-selling, above 1.1030.
- DXY debilitates to daily lows in the 98.55/50 band.
- EMU, German Economic Sentiment bettered consensus.
The recovery from recent lows in sub-1.10 levels is now lifting EUR/USD to the area of daily/weekly highs in the 1.1030/35 area.
EUR/USD firmer despite US data, FOMC
The pair is now gathering extra pace on the back of the renewed offered bias in the Greenback despite the positive results from the US docket.
In fact, Industrial Production and Manufacturing Production expanded at a monthly 0.6% and 0.5%, respectively, during August, surprising markets to the upside. In addition, Capacity Utilization climbed to 77.9%, also coming in above estimates.
EUR trades on a firmer fashion today, somewhat supported by the little improvement in the Economic Sentiment in Germany and the broader euro area. Further data from the ZEW survey saw German Current Conditions contracting more than expected this month.
Later in the day, the NAHB index and TIC Flows will close the docked ahead of Wednesday’s FOMC event.
What to look for around EUR
The selling interest around the single currency has resumed this week, forcing EUR/USD to re-test the 1.10 neighbourhood and a tad below on Monday. In fact, EUR lost some shine following the recent peaks beyond 1.11 the figure, recorded after the ECB announced €20 billion/month in bond purchases under the re-launched QE programme. The occasional recovery in spot, however, is seen as corrective only always against the backdrop of unremitting slowdown in the region, looser for longer monetary conditions by the ECB and the likelihood that the German economy could slip into technical recession in Q3. Adding to this gloomy scenario, potential US tariffs on imports of EU cars remain well on the table, while persistent uncertainty around Brexit adds to the downbeat outlook.
EUR/USD levels to watch
At the moment, the pair is gaining 0.31% at 1.1033 and faces the next hurdle at 1.1109 (monthly high Sep.13) seconded by 1.1163 (high Aug.26) and finally 1.1179 (100-day SMA). On the flip side, a break below 1.0990 (low Sep.16) would target 1.0925 (2019 low Sep.3) en route to 1.0839 (monthly low May 11 2017).