Further upside motivates EUR/USD to trespass the key 1.1000 barriers and print new monthly highs on Thursday.
EUR/USD Now Targets The 2023 Peak At 1.1032
EUR/USD advances for the third session in a row and continues challenging the key 1.1000 neighborhood on Thursday, constantly amidst the persistent weakness in the greenback and the generalized upbeat mood in the risk-linked space.
In the meantime, the hawkish narrative from ECB policymakers continues to lend legs to the pair’s ongoing recovery against the backdrop of divided opinions regarding the size of the next interest rate hike at the May gathering.
In the docket, final inflation figures in Germany showed the CPI rose 7.4% in the year to March and 0.8% vs. the previous month. Later in the session, EMU Industrial Production is due, while weekly Claims and Producer Prices will be in the limelight in the US calendar.
What To Look For Around EUR
EUR/USD advances beyond 1.1000 and records new monthly peaks on Thursday.
In the meantime, 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.
Key Events In The Euro Area This Week: Germany Final Inflation Rate, EMU Industrial Production (Thursday).
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 0.26% at 1.1020, and a break above 1.1032 (2023 high February 2) would target 1.1100 (round level) en route to 1.1184 (weekly high March 21, 2022). On the flip side, the next support comes at 1.0788 (monthly low April 3), followed by 1.0750 (55-day SMA), and finally 1.0712 (low March 24).