The euro has registered gains for a second consecutive day. Currently, EUR/USD is trading at 1.1851, up 0.35% on the day. Earlier in the day, the pair touched a high of 1.853, its highest level in two weeks.
Euro rises on strong Sentix Investor Confidence
The eurozone continues to struggle with Covid, with France entering a new lockdown which includes the closure of schools. The EU vaccine rollout program has been unimpressive, with not nearly enough shots for the bloc’s 445 million residents. With Covid still not under control, economic activity has been generally soft. Given these difficult conditions, it was all the more surprising that Eurozone Sentix Investor Confidence climbed to 13.1 for April, up from 5.0 and easily beating the forecast of 6.8. Clearly, financial analysts and institutional investors are feeling more upbeat about economic conditions over the next six months. There is significant pent-up demand after months of health restrictions, and if the rollout can get on track, the eurozone economy should improve. The ECB expects growth of 1.7% in the second quarter, which would be a decent foundation for economic growth in 2021.
The US dollar has lost some of its lustre, as US Treasury yields have retreated. The greenback failed to take advantage of a stellar Nonfarm Payrolls report on Friday, which rose to 916 thousand, up from 379 thousand. With the Biden administration working on a massive infrastructure package, there are expectations that upcoming NFP prints will exceed the 1-million mark, as the US economy continues to gather steam.
- EUR/USD is testing resistance at 1.1844. If the pair closes above this line, it will target the 1.19 level, with the next resistance line at 1.1893
- On the downside, there is support at 1.1754, followed by a support line at 1.1713
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