EUR/USD prints fresh 2-week highs near 1.0750

The euro gained momentum during the American session and extended gains across the board. EUR/USD climbed to 1.0739, hitting the highest level since November 17. It remains near the highs holding a strong bullish tone. 

From daily lows the pair has now risen more than 200 pips. The rise is taking by surprise to many analysts that expected some bearish pressure following the “No” in the Italian referendum and ahead of the European Central Bank meeting were an extension of the QE program is expected. 

“In moves reminiscent of a minor version of those that occurred on the election of Trump, EUR fell, as most market commentators had expected, on the rejection of the referendum. However, these were more than reversed as European trading began. It is now clear that investors were either neutral or hedged and that speculative positions were biased for downside risk to EUR and Italian assets. The 2% rise in EUR/USD from its pre-European spike low of 1.0505 is the clearest example of this”, said analysts from Westpac. 

The euro also reached fresh highs against the pound and the swiss franc. EUR/CHF reached the highest level in a month above 1.0800. 

Technical levels 

To the upside, resistance levels could be seen at 1.0745 (Nov 17 high), 1.0800 (psychological) and 1.0850 (Oct 25 low).  The price is above the 20-day moving average (stands at 1.0695) for the first time since US election; that line could now offer support; below here the next support areas could be seen at 1.0620 (Dec 02 low) and 1.0550 (Nov 30 low).