EUR/USD – Surges Past 1.15 on EU Historic Agreement – What Next?

The Euro surged past the 1.1500 level as European leaders reached a historic agreement to trade to overnight and February 2019 highs at 1.15398 before settling at 1.1535. EUR/USD grinded higher to1.1542 in early Asian trade this morning. The historic agreement of the EU leaders, while anticipated, still lifted the shared currency. The market’s risk-on tone plus the growing contrast between Europe’s ability to contain the recent coronavirus outbreak with the United States has added lustre to the EUR/USD pair. The Dollar’s slump has also been broad based, and this also played into the Euro’s favour.

EURUSD - 1 Y FXStreet Chart - 22 July 2020
EURUSD – 1 Y FXStreet Chart – 22 July 2020

Expect consolidation today with no major Euro area releases today. The US sees its Existing Home Sales. Tomorrow global Manufacturing PMI reports will be released, and this could set the tone for either a correction or further gains. Speculative short-term market positioning has been long in the EUR/USD pair for some time now and this has yet to see a decent pullback. With every man and his dog bullish on the Euro, there is a strong possibility of this occurrence.

EUR/USD has immediate resistance at 1.1550 followed by 1.1600. Immediate support can be found at 1.1500 and 1.1470. Look for consolidation within a likely range of 1.1450-1.1550. Look to sell on rallies, a pullback is around the corner.

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