EUR/USD inter-markets: Trump drives the sentiment

EUR/USD has clinched fresh 6-month tops beyond 1.1100 the figure for the first time since early November on Wednesday, all exclusively sponsored by a dollar’s play.

In fact, another controversy around President Trump, this time involving the FBI and Russia, has sparked quite a sharp correction in the buck. In fact, in terms of the US Dollar Index (DXY), the greenback has fully retraced the November-January rally, which was, in turn, fuelled precisely by… Trump becoming US President!.

In the meantime, yields in the German money markets are looking to consolidate in the upper end of the recent range, as opposed by their US peers, which are currently challenging monthly lows.

Looking at the broader picture, the likeliness of further tightening by the Federal Reserve at some point in the near/medium term should alleviate some upside pressure in spot and cap gains somewhat. In addition, the abrupt pick up in EUR should mitigate (at least in the near term) some rumours regarding a potential shift to a more hawkish tone by the ECB.

Levels-wise, following the recent tops above the 1.11 handle, a continuation of the up move should face no relevant resistance levels until de early November spike to 1.1300. In case EUR-sellers step in, the mid-1.0800s should offer initial support ahead of the 1.0830/20 region, where sit the 200-day sma and April 24 low.