EUR/USD hits fresh highs as USD weakens
- Spot extends daily gains
- USD drops across the board
- Data ahead: EZ Q3 GDP
The EUR/USD pair found support above 1.1600 rose breaking daily highs. It is rising above a 40-pips range between 1.1600 and 1.1640 that kept price action limited until now.
New highs, still near monthly lows
EUR/USD rose to 1.1643, reaching a fresh high and remains near the top on the back of a decline of the US Dollar across the board. The Dollar index hit a fresh daily low at 94.36 as it retreats from 3-month highs.
The US dollar failed to rally earlier on the back of US Consumer Spending data that jumped 1% in September. After the data, headlines about the Russia-gate hit the wires. Paul Manafort, a former campaign adviser of Donald Trump, pleaded guilty to making a false statement to the FBI. The Russian-gate could offset the impact of the crisis between Catalonia and the Spanish government.
The greenback and Wall Street also weakened during the last hour after a report from Bloomberg signaled that the House of Representatives is considering a 5-year period to introduce Trump’s tax cuts.
Before US Jobs data and FOMC, EZ GDP
While in the US, market participants await next key events that include Wednesday’s ADP report and the FOMC meeting, Trump’s decision on next Fed chair on Thursday and the NFP on Friday, in the Eurozone on Tuesday, GDP data for the third quarter will be released.
“The Eurozone economy has picked up speed since the end of 2016, and most data points for the third quarter have pointed to continued strength. Industrial production surged in August which means that manufacturing growth could even be stronger than in the second quarter”, said analysts from ING. They expect growth to come in at 0.6% quarter-on-quarter.
Levels to watch
Currently, the pair trades at 1.1335/40, holding a bullish tone. To the upside, immediate resistance is seen at 1.1640/45 (daily high), followed by 1.1685 and 1.1725 (Oct 23 low). On the downside, support levels might now lie at 1.1615 (20-hour moving average), 1.1595 (daily low) and 1.1570/75 (last week low).