EUR/USD to challenge the 1.1830 monthly high

EUR/USD is extending its advance this Tuesday, having reached so far a daily high of 1.1817, as hopes for a US coronavirus stimulus package continues to pressure the greenback and generally positive macroeconomic data support the risk-on mood. The pair could gain momentum on a break above 1.1830, FXStreet’s Chief Analyst Valeria Bednarik briefs.

Key quotes

“The dollar is on its back foot amid mounting hopes about a US fiscal aid package, as US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi had speed up negotiations. Worth noting that Pelosi set a 48-hour deadline to clinch a deal that ends this Tuesday.”

“The EU published the August Current Account, which posted a seasonally adjusted surplus of €19.94 B. Also, the German Producer Price Index came in at 0.4% MoM in September, down by 1.0% when compared to a year earlier, beating the market’s expectations. As for the US, the country released September Building Permits, which rose 5.2%, beating the market’s expectations and Housing Starts for the same month that missed estimates by printing a 1.9% monthly gain.”

“The EUR/USD pair is holding above 1.1800, not far from its October high at 1.1830, the immediate resistance level. The pair is bullish in the near-term, as the 4-hour chart shows that technical indicators keep advancing within positive levels, accelerating north near overbought readings. In the mentioned time-frame, the pair is also developing above all of its moving averages, although with the 20 SMA still below the larger ones.”

“Beyond the mentioned monthly high of 1.1830, the pair has room to extend its advance to 1.1870, a strong static resistance level.”