EUR/USD trades to a high of 1.1478 on the day
Not to be left out of the risk on party today, the euro is also joining in on the act as good news from Italy on the budget is helping to bolster Italian assets as well as the euro as we begin things in Europe.
The latest is that Italy's government is seeking a compromise on the budget of a deficit target of 1.9% to 2.0% and that's helping to underpin the single currency. Meanwhile, the dollar is failing to gain any traction so far following the trade truce struck by US and China over the weekend which is helping to keep risk assets bid.
That leaves EUR/USD aiming back towards 1.1400 now as buyers cleared the 200-hour MA (blue line) earlier in the day. The near-term bias is now more bullish. There is some resistance around 1.1474-84 but I'd be looking towards a test of the figure level considering the momentum seen so far today.
The 1.1400 handle and resistance around 1.1410-20 will be key in holding buyers back from a significant break higher in the short-term. Until those levels give way, I'd still be inclined to believe the upside remains limited for the euro given recent economic fundamentals that threatens to derail the ECB's plans to hike rates in 2019.
But perhaps, positioning data also needs to be considered as euro shorts are at its most stretched since March 2017. Some food for thought:
