EUR/USD breaks above 1.1350 and jumps to 3-months highs
- US Dollar resumes the decline and boosts EUR/USD to fresh cycle highs.
- Technicals add more strength to the rally after breaking previous monthly highs.
The EUR/USD pair rose further and climbed to 1.1367, the highest since March 22. It is holding near the top, with the bullish tone intact, and rising for the third-day in-a-row. From Wednesday’s low, it gained 180 pips.
The key fact about the latest run higher was the breakout of the 1.1350 area (previous June high). The Euro gained more strength above and it also rose back above the 200-day simple moving average for the first time since April 2018.
Technicals and a slide of the US Dollar across the board appear to be the key driver behind. Rate cut expectation from the Fed triggered a rally of majors against the US dollar that is still going. The greenback tracked by the DXY, is falling 0.40%, at 96.25, the lowest since March.
After FOMC, focus on inflation and trade war
On a weekly basis, the Euro could post the highest close since January. EZ economic data and Fed rate cut expectations supported the rally over the last five days. Next week in the EZ, the key economic number will be inflation and also in the US with the PCE core.
On the geopolitical front, “all eyes will be on the G20 Xi-Trump meeting next week, but even if both leaders are open to resuming talks, there are many bridges to cross before a deal is struck. We're confident that a resolution will eventually be reached though, which limits the need for agressive Fed rate cuts”, said ING analysts. The outcome could weigh on market sentiment.
This article is published only for general use basic informatory purposes and should not be considered or depended on as a financial or investment advice. Investors should make sure that they understand the risks and seek independent financial advice at all times. CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE.