EUR/USD retreats from fresh 1-week highs, holds above 1.1250
- Euro gains momentum after breaking above 1.1250.
- Weaker US dollar across the board boosts EUR/USD.
The EUR/USD pair rose further after the beginning of the US session and climbed to 1.1273, reaching a fresh 1-week high. From the top pulled back modestly and it is trading at 1.1260, up 45 pips, having the best performance since March 20.
Weaker US dollar but also the euro shows something
The greenback dropped across the board, including emerging market currencies, and despite higher US yields. The weaker US dollar was the main driver in the EUR/USD rally. But the euro shows strength as EUR/GBP and EUR/CHF remain at weekly highs.
Data released today showed in the US that factory orders dropped in February 0.5%, in line with expectations. On Wednesday, CPI data is due and also the FOMC minutes will be released. Regarding the euro, the critical event will be the European Central Bank meeting on Wednesday. No change is expected and most analysts see the bank keeping a cautious tone.
Short-term technical outlook
The EUR/USD pair is finally breaking the 1.1250 resistance level that capped the upside last week. A consolidation on top could signal more strength ahead. The next target could be seen at 1.1285 (March 27 high - 20-day moving average). Above the next resistance is 1.1300/05.
A slide back below 1.1250 would weaken the outlook for the euro. Before the lower bottom of the previous range at 1.1200/05, there is an intermediate support at 1.1230.