Where we are: EUR/USD has broken higher to trade at $1.1600 in early afternoon London liquidity, marking its highest level since early June. The single currency has established a firm base overnight, trading within a $1.1540 to $1.1610 range and holding well above yesterday’s New York close. We are seeing strong technical momentum as the pair clears local resistance, turning the $1.1540 break-level into near-term support. A sustained push above $1.1620 opens the runway for a deeper test of the mid-year highs.
What’s driving it: Eurozone economic resilience is back in focus as the ECB’s sturdier growth outlook gains traction following the Middle East ceasefire, keeping the common currency well-bid. This domestic growth optimism is supported by ECB Chief Economist Philip Lane’s freshly delivered outlook today at 13:10 CET, which emphasizes a steady path forward even as the central bank maintains its mild easing bias after the April cut to 2.50%. This sturdier euro area backdrop is further insulated by the reduction of geopolitical risk, which has sent WTI crude down to $95, easing immediate Eurozone stagflation fears and limiting the need for aggressive ECB rate cuts. This domestic resilience is finding a strong tailwind in global markets as US 10-year yields hold at 4.48% ahead of today’s key US data prints.
- ECB Chief Economist Philip Lane’s economic outlook presentation at 13:10 CET today, reinforcing the central bank’s confidence in the sturdier Eurozone growth trajectory.
- CFTC speculator positioning showing net non-commercial longs slashed by 34,934 contracts to just +13,932 (the 6th percentile of the 52-week range), leaving the market severely underweight and highly vulnerable to a short-squeeze.
- The European Parliament voting yes to the long-delayed US trade deal, staving off tariff threats and removing a massive structural downside risk for Eurozone exporters.
NY session focus: All eyes turn to the US macro data at 08:30 ET, where any softness will trigger an aggressive squeeze in this underweight market. We are watching $1.1620 as the immediate upside trigger, while support on any knee-jerk pullbacks should solidify around $1.1540. The trade that is working is buying intraday dips in EUR/USD, targeting a move toward $1.1680. The trade at risk is holding structural Euro shorts into the New York open as the macro picture shifts. The pain trade for the street is a rapid, positioning-driven run through $1.1700.