The Euro continues to remain well supported against the US dollar after another round of solid economic data added further evidence that the Eurozone is in recovery mode and the worst of the economic meltdown brought about by the coronavirus maybe a thing of the past.
Yesterday we saw retail sales figures and Markit composite PMI figures from Germany come in stronger than expected as well as the PMI figures from the Eurozone as a whole.
This follows on from last Friday’s news which caught the market by surprise when GDP figures hit the market at 13.7% year on year which was well above analysts’ expectations for a figure of 13.2% while the inflation figures also beat market estimates coming in 2.2% above investors predictions for a number of 2.0%.
The main thing here is the inflation figure, which is higher than the ECB’s target rate of 2% and although this is expected to be temporary, it may make the European Central Bank reconsider it options for delaying its tapering of the monetary stimulus programs and this move would give further support for the Euro.
The Euro/USD currency pair is once again facing strong resistance at the $1.1881 level and so far in today’s trading session has been unable to make a break higher.
This is now the 4th day where an attempt has been made to push higher but the bears are keeping the lid on any further moves for now.
With no major economic data out today from the Eurozone we expect the Euro/USD currency pair to remain rangebound within the channel currently displayed on the chart as investors wait for tomorrow’s retail sales figures from the Eurozone for added confirmation of an economic recovery.