EUR/USD remains bid above 1.2100 on dollar selling, data
- EUR/USD retakes the 1.2100 mark and above on Monday.
- USD-selling continues to support the upside in the pair.
- German Business Climate improved a tad in April.
The optimism around the single currency stays unabated and lifts EUR/USD to fresh monthly peaks beyond 1.2100 the figure at the beginning of the week.
EUR/USD up on weaker dollar, data
EUR/USD advances for the second session in a row on Monday, managing to finally break above the 1.2100 mark, levels last visited back in late February.
The sustained advance of the pair in April comes on the back of the purposeful retracement in the dollar, which in turns fall in line with the decline in US yields since the beginning of the current month.
The better note in the pair is also propped up by the small improvement in the German Business Climate to 96.8 (from 96.6), as per the latest IFO survey for the month of April.
Further out, market participants seem to look past the recent pick-up in coronavirus cases in India and Japan and keep their bets high on the economic recovery in Europe amidst the revamped vaccine rollout.
Data wise in the US calendar, March’s Durable Goods Orders and the Dallas Fed Manufacturing Index are due seconded by short-term notes auctions.
What to look for around EUR
EUR/USD finally surpasses the 1.2100 neighbourhood, always against the backdrop of the persevering selling bias surrounding the greenback. Also propping up the better mood in the European currency appears the investors’ shift to the improved growth outlook in the Old Continent now that the vaccine campaign appears to have gained some serious pace. In addition, solid results from key fundamentals pari passu with the surging morale in the bloc also collaborate with the monthly recovery in the pair (from the vicinity of 1.1700 to the boundaries of 1.2100 so far).
Key events in the euro area this week: German GfK Consumer Confidence (Wednesday) – German labour market report, flash April CPI (Thursday) – German, EMU advanced Q1 GDP, EMU flash April CPI.
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.
EUR/USD levels to watch
At the moment, spot is gaining 0.03% at 1.2100 and faces the next hurdle at 1.2116 (monthly high Apr.26) followed by 1.2243 (monthly high Feb.25) and finally 1.2349 (2021 high Jan.6). On the other hand, a breach of 1.1953 (50-day SMA) would target 1.1923 (200-day SMA) en route to 1.1762 (78.6% Fibo of the November-January rally).