The EUR/USD exchange rate hit a six-week high in recent trading. Although it is faltered by resistance on the charts, the single European currency could remain supported in the coming days due to a faltering US dollar and more accommodative Chinese monetary policy. The European single currency surged to its highest level since opening days in July last week after a batch of numbers from the Bureau of Labor Statistics indicated that significant moderation in inflation pressures in the US may have started making its way through the pipeline last month.
- The EUR/USD pair’s gains stopped at the resistance level of 1.0368, and then quickly returned to decline amid profit-taking sales, to reach the support level 1.0160 at the time of writing the analysis.
- The euro recovered its strength around 1.0361, which closely coincides with the 55-day moving average and the 61.8% Fibonacci retracement of the June decline from levels above 1.06.
- The euro still holds many of its weekly gains.
Commenting on the EUR/USD performance, Sean Osborne, Senior FX Analyst at Scotiabank said, “We are looking for EUR/USD to fund support at 1.02 higher in the near term. Growth/recession/energy supply concerns remain a threat to the euro outlook.”