The EURUSD pair continued in its bullish tracks and was trading 0.25% stronger during the US session, hovering at around 1.0950, although some 30 pips off the daily highs reached in the morning.
Earlier in the day, German investor confidence surprised to the upside, when the ZEW Economist Sentiment surged to 51 from 28.2, beating expectations of a 32.0 print and far above the deeply negative print just two months ago.
However, sentiment worsened after French Finance Minister Bruno Le Maire said that the European recovery fund proposed by France and Germany won’t be available until 2021 and still faces hurdles in “difficult” negotiations in the coming weeks.
Moreover, US housing starts fell 30.2% month-over-month in April (worse than the 26.0% drop expected and accelerating considerably from the 22.3% drop in March). This is a record drop. US building permits fell 20.8% on a monthly basis in April (better than the 25.9% expected).
It appears that the key resistance for the EURUSD pair is still around 1.10. If the pair closes above this level, we could see a more substantial rally toward 1.1150.
On the downside, the support could be seen near 1.09, and while the euro trades above this level, the short-term outlook seems bullish. The next support is still in the 1.08 area.