The EUR/USD moved higher after breaking out on Wednesday following the Fed’s decision to increase rates, and the Dutch elections that pealed back the view that the populist movement was spreading across Europe. The EURUSD rate sliced through trend line resistance near 1.0710, and is poised to test the February highs at 1.0829. Support on the Euro to the US dollar is seen near the 10-day moving average at 1.0629. Stronger than expected EU inflation also helped boost the currency pair.
Interest Rate Differential Drive the Euro Higher
Momentum has turned positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal. The index is now printing in the black with an upward sloping trajectory which points to higher prices. The interest rate differential in the 10-year space has moved in favor of the Euro, which is driving the currency pair higher. This comes despite a stronger than expected U.S. Philly Fed survey.