- The EUR / USD rise exceeds 1.1200 on Wednesday.
- The sense of risk remains firm and maintains the rally of the pair.
- The change in unemployment in Germany increased by 238,000 in May.
Widespread optimism surrounding riskier assets provides additional support for the single currency and raises EUR / USD to new heights further north of 1.1200 the figure.
EUR / USD supported by risk mood
The rally in EUR / USD remains good and solid for a new session on Wednesday, prolonging the rise near 1.1230 and trading at a glaring distance from the peaks of December 2019 near 1.1240.
Hopes of a gradual return to normal activity in the economies of the Old Continent and on the other side of the pond have rekindled the feeling towards the complex associated with risk and further fueled the idea that the coronavirus pandemic could already be behind us.
In addition, market participants have found another reason to continue to favor the riskiest assets after the German services PMI stood at 32.6 for May, exceeding estimates and more than doubling the previous reading. The results of the same indicator in France, Spain, Italy and the enlarged euro area also exceeded expectations. Also in Germany, the unemployment rate rose to 6.3% in May while the change in unemployment increased more than expected by 238K.
Upcoming data releases include producer prices in the eurozone, while ISM Non-Manufacturing, Factory Orders and the ADP report will be central to the US record.
What to look for around the EUR
EUR / USD surpassed the 1.1200 mark in a context of good humor in the risk universe. As usual, the weak dollar and the positive outlook following the gradual reopening of economies around the world confirm investors’ preference for riskier assets. In addition, Germany plans to inject an additional € 100 billion into its economy, in addition to the recently proposed aid of € 750 billion conditioned by the European Commission (EC). The continued support for the euro is also due to the solidity of the region’s current account.
EUR / USD levels to watch
For the moment, the pair is up 0.26% to 1.1198 and a break above 1.1227 (weekly / monthly high on June 3) would target 1.1239 (monthly high on December 31, 2019) in route to 1.1391 (monthly high of June 13, 2019). On the other hand, the immediate controversy emerges at 1.1011 (200-day SMA), followed by 1.0902 (55-day SMA) and finally at 1.0870 (weekly trough on May 26).