EUR/USD briefly tested the vicinity of the key support in the 1.17 neighborhood on Wednesday, managing to regain some pace soon afterward. EUR/USD pushed higher and recorded new highs near 1.1920 in the second half of last week, triggering a corrective move to the 1.17 zone so far. The July-August rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain inauspicious results from domestic fundamentals, which have been in turn supporting further the view of a strong economic recovery in the wake of the coronavirus fallout. Also lending wings to the momentum around the euro appears the recently clinched deal on the European Recovery Fund – which helped to put political fears within the bloc to rest (for now) – and the solid position of the current account in the region.
At the moment, the pair is retreating 0.06% at 1.1733 and faces the next support at 1.1695 (monthly low Aug.3) followed by 1.1495 (monthly high Mar.9). On the other hand, a breakout of 1.1916 (2020 high Aug.6) would target 1.1996 (high May 14, 2018) en route to 1.2032.