The Euro continued its advance, outperforming FX, climbing to an overnight high at 1.18064 before easing to settle at 1.1795 in New York. Europe’s economic recovery has outpaced that of the US and many parts of the world with its success in controlling the coronavirus outbreak. The generally brighter outlook has enabled the shared currency to outperform its US counterpart as well as other currencies. Tonight’s German GDP report, while forecast lower, is much better than what is expected from the U.S. Even at current levels, it looks like bright skies and the green light for further Euro advances. Sentiment is very much in favour for the shared currency.
That said, speculative long Euro bets in the futures market continues to climb to new multi-year peaks. The recent uptick in virus cases in Europe need to be monitored. And a weaker-than-expected German GDP report could very well see a set-back for the Euro.
EUR/USD has immediate resistance at 1.1810 followed by 1.1840. Immediate support lies at 1.1750 followed by 1.1710. Look for consolidation in a likely range today of 1.1700-1.1800. Preference is still to sell rallies, a corrective pullback will begin soon.