EUR/USD Extends The Recovery To The 1.1060 Region Ahead Of Data

The optimism among market participants remains firm and pushed EUR/USD back to the 1.1060/65 band on Thursday.

EUR/USD Now Focuses On Data, US GDP

EUR/USD advances for the second session in a row and maintains the multi-week rally well and sound, with the immediate target now at the 1.1100 round level. It is worth noting that the pair closed with gains in 8 out of the last nine weeks, having gained more than 5 cents since late February.

In the meantime, hawkish ECB-speak and prospects for additional interest rate hikes following the May gathering continue to underpin the bullish stance in the European currency for the time being.

Later in the euro docket, the final Consumer Confidence gauge is due seconded by Economic and Industrial Sentiment. The US’s advanced Q1 GDP Growth Rate will be in the limelight, backed by usual weekly Initial Claims and Pending Home Sales.

What To Look For Around EUR

EUR/USD keeps a positive performance and consolidates the recent breakout of the psychological 1.1000 barriers.

Meanwhile, price action around the single currency should continue to closely follow dollar dynamics and the developing Fed-ECB divergence regarding the banks’ intentions regarding the potential next moves in interest rates.

Moving forward, hawkish ECB-speak continues to favor further rate hikes, although this view appears in contrast to some loss of momentum in economic fundamentals in the region.

This week’s key events in the euro area: Final Consumer Confidence, Economic Sentiment (Thursday) – Euro group Meeting, Germany labor market report/ Advanced Inflation Rate/Flash Q1 GDP Growth Rate, EMU Flash Q1 GDP Growth Rate (Friday).

Eminent issues on the back boiler: Continuation (or not) of the ECB hiking cycle. Impact of the Russia-Ukraine War on the region’s growth prospects and inflation outlook. Risks of inflation becoming entrenched.

EUR/USD Levels To Watch

So far, the pair is gaining 0.06% at 1.1045, and the breakout of 1.1075 (2023 high April 14) would target 1.1100 (round level) en route to 1.1184 (weekly high March 21, 2022). On the other hand, the initial support aligns at 1.0909 (weekly low April 17), seconded by 1.0831 (monthly quiet April 10) and finally 1.0788 (monthly low April 3).

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