The EUR/USD currency pair heading towards ending May on the bullish track and rose towards 1.11 level while representing a 1.25% gain on a month-to-date basis and a 1.75% rise on a week-to-date basis. However, the reason for the currency pair's bullish bias could be attributed to the European Union's (E.U.) bigger-than-expected fiscal stimulus proposal of 750 billion EUR. The modest selling bias in the broad-based U.S. dollar also kept the currency pair higher.
Despite the intensifying tension between the United States and China relations, triggered by China's national security laws for Hong Kong and Macau during the previous week, the U.S. dollar ended this week with modest losses. This was possibly due to the recent optimism about a possible COVID-19 vaccine and hopes of a global economic recovery, which eventually contributed to the pair's gains.
Whereas, The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.09% to 98.258. The shared currency bullish bias was further bolstered by the further expectations of the European Central Bank (ECB), expanding its bond-buying next week to boost economic recovery.
At the coronavirus front, the number of valid coronavirus cases increased to 180,458, with a total of 8,450 deaths reported so far on the day. Whereas, the number of new infections doubled from Thursday's figures, as the German economy further re-opened, as per the latest data from the German disease and epidemic control center, Robert Koch Institute (RKI).
At the data front, the traders will closely observe the German Retail Sales (Apr), which is scheduled to release at 06:00 GMT, and the preliminary reading for Eurozone's Consumer Price Index for April, due at 09:00 GMT.
The currency pair may face bearish pressure if the inflation figure prints below expectations. Whereas, the central bank is going to conduct rate review and publish fresh economic forecasts next week. Most of the analysts believe that the European Union fiscal stimulus program will not be enough for a game change. Although, it will be considered the right step, which would allow peripherals to inject more stimulus into their economies from 2021.
Moving on, the more substantial gains in the EUR/USD currency pair could be elusive if President Donald Trump announces another sanction on the Dragon Nation in revenge on Beijing's decision to control Hong Kong's autonomy.
Daily Support and Resistance
S1 1.0799
S2 1.0896
S3 1.0955
Pivot Point 1.0993
R1 1.1051
R2 1.109
R3 1.1187
The bullish bias of the EUR/USD proceeds to control in the market as the EUR/USD is traveling northbound towards an immediate resistance level of 1.1150 level. The EUR/USD pair has already disrupted the triple top resistance level of 1.09985, and a bullish breakout of 1.1146 level may influence the EUR/USD prices to lead them further higher towards 1.12118 level. On the 4 hour chart, the pair has also closed three white soldiers in the daily timeframe, supporting an upward trend in the market. Good luck!