The Euro accelerated its move north in early Asian trade after consolidating to close at 1.1848 in New York. EUR/USD hit a fresh 2018 high at 1.1889 before easing to settle at its current 1.1875. The catalyst is still the weakening US Dollar given the recent Trump tweet and the failure of US lawmakers to agree a much-needed coronavirus stimulus bill. EUR/USD has climbed from 1.14-1.18 in two weeks and the speculative futures market is extremely overbought. Overnight Germany’s GDP slumped to its worst level in at least 50 years. German 10-year bund yields fell by 4 basis points to -0.54%, outpacing the drop in its US counterpart which was 2 basis points lower.
Today the Euro faces a further test with the release of French, Italian, Spanish and Eurozone Q2 GDP’s. Coronavirus cases have also been rising in Spain, France, and Italy. EUR/USD faces immediate resistance at the 1.1900 level followed by 1.1930. Immediate support can be found at 1.1840 followed by 1.1800 and 1.1770. The shared currency remains vulnerable to a sharp pullback. Look to sell rallies in a likely 1.1750-1.1900 range.
