EUR/USD: will growth continue?
EUR/USD showed another week of growth rising above 1.1200. The euro went above the late March – early April highs and closed above January low at 1.1097 on Wednesday.
The pair got strength from the general weakness of the US dollar. In addition, the single currency was driven up by the rising German bund yields as the fears of deflation is the euro area receded. Moreover, the prospects of Greece getting bailout money improved. The nation reshuffled its negotiating team decreasing the role of Finance Minister Yanis Varoufakis. As you might remember, Varoufakis failed to achieve progress in the talks with the European creditors. Greek government hopes that now when Varoufakis is pushed aside, lenders will be more compliant.
The next meeting of the Euro group will take place on May 11. Until then major developments of the Greek situation are unlikely, though occasional comments from various officials will stir the euro. The first week of May will be rather light in terms of economic data from the euro area. Pay some attention to the release of the EU economic forecasts on Tuesday.
The area of 1.1215/50 offers rather strong resistance. However, market participants will be very cautious with selling the single currency. Next target on the upside is the 100-day MA at 1.1311. EUR/USD is expected to find strong support at 1.1100 and 1.1000. We may see some consolidation between 1.12 and 1.10.