The Euro and EURUSD extended its advance for the sixth day running, trading to an overnight high at 1.1658 before easing to settle at 1.1553 where it currently sits. Last month the Euro and EURUSD finished around 1.1230. The Euro has strengthened against the Greenback on the Euro area’s ability to control the spread of Covid-19 as businesses slowly opened and the European Union successfully passed the EU Recovery Plan. Long speculative market positioning in the futures market has been at multi-year highs (biggest net Euro longs since early 2018). There has yet to be a correction of EURUSD positions.
Watch the developments of this second wave of coronavirus infections in Spain, Germany and France. Already some European countries have put travel restrictions on incoming travellers from Spain. This will force some businesses to shut down once again which will impact the wider European economy. This may very well be the catalyst for a Euro corrective move lower.
EURUSD has immediate resistance at 1.1680 followed by 1.1700. Immediate support can be found at 1.1620 with 1.1580 the next support level. Look for consolidation today with a likely range between 1.1570-1.1670. Prefer to sell rallies.