The euro rises to the highs for the day as hopes of a EU recovery fund compromise also boost risk appetite
EUR/USD is now touching a session high of 1.1000 as the pair is getting a boost from reports that the European Commission is outlining a proposal to seek a compromise between the Franco-German proposal and that from the “frugals” over the weekend.
A mixture of both grants and loans is what they have concocted, but it remains to be seen if this will be enough to satisfy all parties and get everyone to sign off on the proposal.
That said, the market reaction is already more favourable with stocks rising and the euro also climbing on the back of the news. Meanwhile, the dollar has seen its mild gains earlier erased as it falls to a session low against other major currencies; yen also weaker.
For EUR/USD, this is yet another key test of the 1.1000 handle after having failed a couple of times already to break above this level. From a technical perspective, holding a break above this and the 200-day MA (blue line) @ 1.1012 is key for buyers right now.
If they can manage that, the technical outlook in the pair turns more bullish and buyers will gain more conviction to chase a move back towards the end March highs @ 1.1147-63.