EUR/USD eased back following Tuesday’s big run to the upside, but has resumed the move higher in today’s trading and is currently at 1.0757, a gain of 0.44% over Wednesday’s North American close.
The pair reached a high of 1.0777 in today’s trading, which corresponds to a 61.8% retracement of the decline from the late-March high to the April low. A sustained move above this retracement would increase the probabilities of a full retracement with a move back to the March high at 1.0906.
The fact that EUR/USD is extending its run to the upside in the presence of an overbought condition is a positive sign, signaling that a break above the 61.8% retracement is likely.
On the downside, initial support is at the 1.0736 level, followed by 1.0700. At present, given today’s show of strength, a move below these levels of support is not expected.
In today’s session, German PPI, month-over-month, for March was reported at 0.0%, which was slightly below consensus forecast for a reading at 0.1% and a prior reading at 0.2%. Year-over-year came in at 3.1%, also slightly below forecast for a reading at 3.2%.
In the US, weekly jobless claims are due at 08:30 ET, as is the Philadelphia Fed Index. Leading indicators will be released at 10:00 ET.
EUR/USD Daily Chart