EUR/USD touches a high of 1.1467, its highest level since 9 March
The news from earlier (⬆️) is giving the euro a decent push higher to start the session, with EUR/USD climbing from flat levels around 1.1430 to fresh highs since 9 March of 1.1467.
Euro buyers are banking on a firm compromise on the recovery fund, but they need to do more to try and crack key resistance around 1.1495-00 to extend the momentum further.
That will be the key level to watch in the sessions ahead if the euro is to chase any material break to the upside based on the news we are seeing.
The thing to watch out for though is a potential “buy the rumour, sell the fact” play.
Euro long positions have continued to build over the past few weeks and with price action approaching a key resistance level i.e. 1.1495-00, there is good reason for buyers to take profits amid having already priced in the optimism on the news above.
A compromise between European leaders is certainly positive and bodes well for the recovery, but the fact that it may still not be so straightforward with plenty of details yet to be ironed out may give reason for euro buyers to take a breather in the aftermath.
The knee-jerk reaction is no doubt positive, but what comes after depends on the conviction of EUR/USD to break back above 1.1495-00 in my view.
Failure to do so could keep euro gains at bay for the time being with any drop back under the 100-hour moving average @ 1.1405 to prove as a major setback for buyers.