The EUR/USD pair opened the trading week strongly as lower US yields put selling pressure on the US dollar in the early London session. Vaccination efforts in Europe and German politics (the Green Party announces their Prime Minister candidate) are also likely supporting the pair.
Today's light economic calendar doesn't come with any major market reports. In the eurozone, the current account report missed expectations and came in at 25.9B vs 31.2B expected. However, the market reaction was rather muted.
INTERMARKET:
2-year yield differentials between German Bunds and US Treasuries follow the price-action nicely and support higher prices.
SENTIMENT: Currency Strength Index:
The USD is by far the weakest currency for the day while the euro index trades just in between other major currencies. Risk currencies are outperforming.
Risk Sentiment:
Risk sentiment remains supportive for the pair, with most major stock indices and copper futures higher in the early London session. Shanghai Composite is the clear winner (thus supporting the AUD), while the German DAX trades around breakeven.
TECHNICALS Price-Action: The EURUSD pair reached multi-week highs and trades in a healthy uptrend, forming rather shallow corrections and strong projections. Today's strong buying momentum could see some corrective moves, but 1.20 and the mid-1-19 levels could provide support.
The buying momentum came with a nice increase in volume, signaling a possible participation of larger market players.
== SUMMARY == The pair could see further upside potential, with pullbacks providing buying opportunities. A break below 1.1950 would likely halt the uptrend for the time being.
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