The euro further advanced against the U.S. dollar after German Chancellor Angela Merkel said the euro is “too weak” because of the European Central Bank’s monetary policy. Her statement gave traders yet another reason to buy euros towards the next resistance level at 1.13. Speaking of euro strength, an end to the rally is not yet in sight and if the euro overcomes the 1.13-reistance significantly, we may see a run for 1.1420/50. A current support is however seen at around 1.1215, followed by a stronger support zone near 1.1170.
The German PMI report is scheduled for release at 7:30 UTC, followed by the German IFO Index 30 minutes later. However, none of these reports is expected to have a significant impact on the euro’s price action.
The British pound failed to make significant progress above the 1.30 level, whereas, on the other side, it was little affected by a terrorist attack at a concert in Manchester in which 22 people were killed. The pound traded resiliently between 1.3050 and 1.2965 and as long as it remains firmly above 1.29 we do not see any major downside risks. On the topside, the 1.3065-mark needs to be broken in order to spark fresh bullish momentum.
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