Now that the euro has settled above the descending 20-DMA, the prices may target the 1.0700 mark

The euro rallies on Monday as the greenback keeps retreating across the market. The USD index stays pressured since last week, challenging early-May lows around 102.40 after failure to regain the 103.00 mark. Against this backdrop, the common currency advanced to one-month highs around 1.0665 in early European trading hours and was last seen clinging to the upper end of the extended trading range, suggesting the EURUSD pair could see fresh local highs in the near term.

Adding to an upbeat tone surrounding the euro, fresh data showed that Germany’s May Ifo business climate index came in at 93.0 versus 91.4 expected. The Ifo economists noted that the German economy remains resilient and there are no signs of a recession for now. 

Elsewhere, European Central Banks President Christine Lagarde said today that they are likely to be in a position to exit negative rates by the end of the third quarter, adding that this would allow a rate hike to take place in July, in line with forward guidance.

Buoyed by upbeat economic data coupled with a relatively hawkish tone by Lagarde, the European currency retains a solid bullish tone for the time being. The pair could extend the ascent should the buck continue to give up gains in the coming days. On Tuesday, EURUSD may be affected by fresh PMI data. Should the US figures disappoint, recession concerns will intensify, thus pressuring the dollar across the market.  

Now that the euro has settled above the descending 20-DMA, the prices may target the 1.0700 mark for the first time since April 26. However, as the financial markets remain nervous and unstable, EURUSD could lose the upside momentum and reverse recent gains should risk aversion reemerge.


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