EUR/USD Rallies Significantly, Gold Hits New Record High
- EUR/USD extended its upward move above the 1.1600 and 1.1620 resistance levels.
- Gold price rallied further above $1,920 and traded to a new all-time high.
- GBP/USD also climbed higher and settled above 1.2750.
- The German IFO Business Climate Index could increase from 86.2 to 89.3 in July 2020.
EUR/USD Technical Analysis
In the past few days, the Euro started a steady increase above the 1.1550 resistance against the US Dollar. EUR/USD even surged above 1.1600 to trade to a new monthly high.
Looking at the 4-hours chart, the pair gained momentum after it settled above the 1.1600 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
It even traded to a new monthly high above 1.1650. The current price action suggests that the pair is following a nice uptrend above the 1.1600 level. There is also a crucial bullish trend line forming with support at 1.1570 on the same chart.
If the pair starts a downside correction, the bulls are likely to protect 1.1600 or 1.1570. Conversely, the pair is likely to continue higher above 1.1665 and 1.1680. The next major resistance could be 1.1720, followed by 1.1800.
Fundamentally, the Euro Zone Manufacturing Purchasing Managers Index (PMI) for July 2020 (Prelim) was released by the Markit Economics. The market was looking for an increase in the PMI from 47.4 to 50.0.
The actual result was well above the market forecast, as the Euro Zone Manufacturing PMI increased to 51.1. Moreover, the Euro Zone Services PMI posted a sharp increase from 48.3 to 55.1.
The report added:
Business activity across the eurozone rose for the first time since February, according to provisional PMI® survey data, growing at the sharpest rate for just over two years as economies continued to reopen after lockdowns implemented to prevent the spread of the coronavirus disease 2019 (COVID-19).
Overall, EUR/USD is likely to continue higher. Looking at gold price, there was a crucial upside break above the $1,900 resistance area (as discussed in the last technical analysis).
Upcoming Economic Releases
- German IFO Business Climate Index July 2020 – Forecast 89.3, versus 86.2 previous.
- US Durable Goods Orders June 2020 – Forecast +6.5% versus +15.7% previous.