EUR/USD at 4-mth high as EU talks continue

It’s been a quiet start to the week for EUR/USD, with only second-tier releases out of the eurozone and no events in the US. Ordinarily, investors would focus on upcoming fundamental releases, but the markets are glued to Brussels, where EU leaders are gathered. The two-day summit has been extended to a fourth day, as EU members are reportedly close to reaching an agreement on the massive EU pandemic recovery fund, which totals EUR 750 billion. Given the severe economic conditions facing the EU, there is considerable pressure on leaders to sign on to a deal as to how to allocate these funds.

The main stumbling bloc is based on a north-south divide. The ‘frugal four’ EU members (Austria, the Netherlands, Sweden and Denmark) want a smaller aid package and are demanding that most of the funds be in the form of loans rather than grants. The “club Med’ members, such as Italy, France and Greece, say that they desperately need the aid as grants. As expected, the talks have been difficult and at one point looked like they were doomed to failure. However, the talks are scheduled to continue later on Monday. If the leaders can reach an agreement, we could see the euro respond with gains and push above the 1.15 mark.

EUR/USD Technical

 

EUR/USD touched a high of 1.1467 in the Asian session, its highest level since March 2. The pair is currently trading at 1.1443, up 0.13% on the day.

  • 1.1454 is an immediate resistance line, followed by 1.1482
  • 1.1388 is providing support. Below, we find support at 1.1350
  • The 10-day MA has provided support since July 7. Currently, it is at 1.1360

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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