As the expectations for US rate rises this year tempered, EUR/USD made another push to the upside reaching levels above 1.13.
There will likely be more verbal interventions from the European Central Bank as the euro heads up. As inflation in Europe is very low, the regulator would not want the national currency to strengthen by much. The ECB chief economist Praet said on Friday that the deposit rate may be cut further if needed. However, so far the ECB’s efforts haven’t done much to discourage the euro bulls, so, in our view, euro will be bought back in case of declines.
Resistance is at 1.1375 and an increase above this level will open way up to 1.15. Support is at 1.12 and 1.1050.
Tuesday will be the most intense day of the next week in terms of the economic data from the euro area: firstly, the region will release flash manufacturing & services PMIs; secondly, Ifo business climate and ZEW economic sentiment indexes are due for Germany.