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EUR/USD Rose To Session High Around 1.1371 - Eyes On US weekly jobless claims!


Today in the Asian trading session, the EUR/USD currency pair successfully extended its previous day's winning streak and hit the fresh high around the 1.1371 level while representing a 0.24% increase. The surge in currency pair could be attributed to the fall of borrowing cost for Eurozone's riskiest to levels last seen before the beginning of the coronavirus crisis. On the other hand, the currency pair's bullish bias could also be attributed to the modest upbeat trading sentiment that undermined the broad-based U.S. dollar and contributed to the currency pair gains.

The hopes of the pandemic emergency purchase program by ECB also provided support to the shared currency and helped currency pair to hit session highs. At the press time, the EUR/USD currency pair is currently trading at 1.1356 and consolidating in the range between 1.1325 - 1.1371.

The spread between the 10-year Greek and German government bond yields dropped to 1.53 yesterday to hit the lowest level since February. Thus, the spread between the Italian and German 10-year bond yield also declined to 4.5-month lows. Whereas, the European Central Bank bought 1.35 trillion euros of assets in the Eurozone in the wake of a pandemic emergency purchase program (PEPP) and the bond-buying program of 20 billion EUR per month.

However, the bullish sentiment surrounding the shared currency was further bolstered by the reports showing the German trade surplus expanded to €7.6 billion in May (from €3.4 billion), with Exports and Imports expanding 9.0% and 3.5%, respectively. On the other hand, the Current Account surplus shrunk to €6.5 billion in the same period (from €9.1 billion).

However, the upbeat sentiment was supported by the hopes about the coronavirus vaccine as Dr. Anthony Fauci said Phase 3 vaccine trials may begin at the end of July. He is cautiously optimistic about a vaccine by year-end. It should be noted that the researchers around the world are developing more than 145 vaccines against coronavirus. Whereas, there are currently 21 vaccines in human trials as per the New York Times vaccine tracker.

Despite the ever-increasing number of new coronavirus cases and the possibility of renewed lockdowns, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day. However, the losses in the U.S. kept the pairs' prices high. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.16% to 96.213 by 12:21 AM ET (5:21 AM GMT).

Moving on, the shared currency will take further bids if the EUR 750 billion packages backed by European Commission bonds to help economies beaten by the lockdowns, could usher in greater fiscal integration, as noted by Jeroen Blokland, head of Robeco Asset Management. Looking forward, the market traders will look forward to the data of the U.S. weekly jobless claims. As well as, the traders will keep their eyes on the virus updates and news concerning China.

Daily Support and Resistance

S1 1.1184

S2 1.1248

S3 1.1279

Pivot Point 1.1312

R1 1.1344

R2 1.1377

R3 1.1441

The EUR/USD pair has disrupted the triple top resistance mark of 1.1340 level, and above this, the pair has the potential to go after the 1.1405 resistance area. An upward breakout of the 1.1405 level can drive more buying until 1.1489. For now, the pair may drop until 1.1300 support level first to test upward channel support. Above this, the pair may bounce off over 1.1305 level to target 1.1370.

Good luck!

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