Euro bulls seem to be on a mission to test fresh 2020 highs above 1.1495.
The EURUSD jumped roughly 60 pips on Monday, hitting 1.1467 before retracing back towards 1.1440 amid profit-taking and a stabilizing Dollar.
Given how the Greenback is likely to remain depressed and unloved, Euro bulls may have enough confidence to challenge the 1.1495 yearly high in the short to medium term. Fundamental drivers in the form of EU fiscal hopes and PMI data later this week could influence buying sentiment towards the Euro.
Looking at the technical picture, the EURUSD is bullish on the daily charts as there have been consistently higher highs and higher lows. Prices are trading comfortably above the 20 and 50 Simple Moving Average while the MACD has crossed to the upside. If the 1.1400 proves to be reliable support, this should offer enough foundation for the EURUSD to attack 1.1495.
A breakout above this yearly high may encourage a move towards levels not seen since October 2018 above 1.1600.
Alternatively, an appreciating Dollar could easily throw a proverbial wrench in the works for this bullish setup with weakness below 1.1400 signalling a technical correction towards 1.1300 and possibly lower.
Commodity spotlight – WTI Oil
Oil markets remain unfazed and unamused by OPEC’s decision to taper production cuts from 9.7 million barrels per day to 7.7 million barrels starting from August 2020.
Although Oil demand has jumped in recent weeks due to easing lockdown restrictions, tapering production cuts may be premature given the state of the global economy and rising coronavirus cases in the United States. Any signs of lockdown measures being reinstated or global growth crumbling even further could trigger demand-side fears – ultimately exposing WTI & Brent crude to downside shocks.
Looking at the technical picture, WTI Oil is struggling to push beyond $41 on the daily charts. Sustained weakness below this point could a move back towards $36.
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