EUR/USD rises further and hits fresh 2-week highs above 1.1800
- Spot traded above 1.1800 for the first time since late October.
- USD extended losses across the board.
- DXY at lowest in almost three weeks.
The EUR/USD pair rose further during the American session and reached levels on top of 1.1800 for the first time since October 26. At the moment of writing, trades at 1.1795/98, up 135 pips, having the best day since June.
The rally started during the European session on the back of a stronger Euro boosted by economic data from the Eurozone. After the beginning of the American session, the greenback weakened considerably and tumbled across the board, adding further strength to the EUR/USD rally.
US data today included a higher-than-expected PPI reading for October, with the annual rate reaching the highest level since 2012. The inflation numbers did not offer support to the US dollar. Tomorrow will be the turn of the CPI and retail sales.
US PPI: Inflation accelerates at the start of Q4 - Wells Fargo
The US Dollar Index is falling at the fastest pace in months. It opened the day near 94.50 and recently bottomed at 93.63, a 2-week low. The DXY is about to post the first close significantly below the 20-day moving average since mid-September.
The perspective for the euro has improved significantly with today’s rally. Price broke above the key 1.1700 and then on top of a downtrend line from September highs. Also rose above the 20-day moving average and climbed to test the 55-MA. EUR/USD gains reinforced the case that a short-term bottom might be in place at 1.1553, last week low and the weakest in four months.
Short-term technical indicators show overbought readings but so far no signals of a correction have emerged. To the upside, immediate resistance is seen at 1.1800/05 (Nov 14 high), followed by 1.1835 and 1.1855/60 (Oct 19 & 20 high). On the flip side, FXStreet's technical confluence indicator identifies support levels at 1.1765, 1.1725 and 1.1650.