EUR/USD – Slips Off 1.1345 Highs, One-Week Uptrend Shaky

The Euro extended its advance peaking at an overnight and near two-week high at 1.1345 before slumping to 1.13710 in late New York. With Europe less affected by the resurgence in Covid-19 infections and improved economic data, the Euro has benefitted. Yesterday, Eurozone Retail Sales increased more than expected and offset a fall in Germany’s Factory Orders. Late last week, Euro area services data mostly bettered expectations. These factors have served to boost the shared currency which has enjoyed an uptrend for one week now. However, net speculative long Euro market positioning, already at their largest since early 2018, continues to build. This is a big danger signal.

EURUSD FXEmpire Chart - 07 July 2020
EURUSD FXEmpire Chart – 07 July 2020

EURUSD has immediate resistance at 1.1350 followed by 1.1380 and then 1.1420. Immediate support lies at 1.1300, 1.1270 and then 1.1240. The Euro has climbed from its May lows under 1.0800. The question from here is can it sustain itself higher? The weight of a speculative long market, which needs to correct, will keep the shared currency capped. Look to sell into any rallies with a likely range today of 1.1150-1.1250.

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