EUR/USD breaks above 1.1400, eyes 2017 highs


The euro broke clearly above 1.1400 against the US dollar and climbed to 1.1424, rising back to the levels it had at the beginning of the week. It remains around the daily top, near 2017 highs. 

EUR/USD extends gains as USD retreats 

The US dollar continues to move to the downside, measured by the US Dollar Index, it trades at 95.55, at the lowest in three days. It has erased most of the week’s gains. Economic data did not help the greenback. 

The first US economic report, came in below expectation with a positive change in private payroll, according to ADP, by 158K, below the 180K of market consensus. Then, service sector data rose unexpectedly. The Markit PMI climbed to 54.2 while the ISM non-manufacturing reached 57.4. 

US: Private sector employment increased by 158,000 jobs in June – ADP 

US: ISM Non-Manufacturing Index recovers in June – Wells Fargo

After the ADP report, the euro received a boost from the European Central Bank minutes. The document showed discussions about dropping the “easing bias”. European bonds tumbled, sending some yields to the highest in more than a year.  

ECB: Longer-term inflation expectations in the euro area remained broadly unchanged

Technical outlook ahead of NFP 

Valeria Bednarik, Chief Analyst at FXStreet explained that EUR/USD has corrected partially lower and seems now ready to regain the upside. “In the daily chart, technical indicators have resumed their advances after modestly correcting extreme overbought readings whilst the price is far above bullish moving averages, indicating that the upside is still favored despite this early week’s retracement.”

She added that above the 2017 high at 1.1445, there is a stronger resistance at 1.1460 and above, the euro could advance up to 1.1494, followed then by the 1.1520/30 region. “Only below the 1.1290 support, the greenback will be able to advance further, still in corrective mode, with 1.1250 and 1.1210 as the next supports”, said Bednarik. 

 


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