EUR/USD remains bid and clinches weekly highs past 1.1050

• EUR/USD adds to the weekly rebound beyond 1.1050.
• EMU Final February CPI next on tap in the domestic docket.
• Initial Claims, housing data, Philly Fed index due next in the NA session.

The optimism around the single currency remains well on the rise and lifts EUR/USD to new weekly peaks past the 1.1050 level on Thursday.

EUR/USD stronger on risk appetite, geopolitics

EUR/USD advances uninterruptedly since Monday and manages to retake the psychological 1.1000 mark and above against the backdrop of the continuation of the selloff in the greenback and persistent hopes of a positive outcome from the Russia-Ukraine peace talks.

In the meantime, German 10y benchmark yields correct lower from recent tops, in line with the rest of the global yields and reflecting some recovery in bond prices in the wake of the FOMC event on Wednesday.

In the euro docket, the final EMU CPI for the month of February will be the only release of significance along with speeches by Chairwoman C.Lagarde and Board member P.Lane.

Across the Atlantic, usual Initial Claims are due seconded by the Philly Fed manufacturing gauge and results from the housing sector.

What to look for around EUR

The European currency keeps the bid bias unchanged and surpasses the 1.1000 barrier once again, always on the back of the renewed optimism in the risk-linked universe and the intense downtrend in the dollar. Pockets of strength in the euro should appear propped up by the speculation of the start of the hiking cycle by the ECB at some point by year end, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a firmer currency for the time being.

Key events in the euro area this week: ECB Lagarde, EMU Final CPI (Thursday) – EMU Balance of Trade (Friday).

Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the euro area. Speculation of ECB tightening/tapering later in the year. Presidential elections in France in April. Impact of the geopolitical conflict in Ukraine.

EUR/USD levels to watch

So far, spot is gaining 0.18% at 1.1053 and faces the next up barrier at 1.1067 (weekly high Mar.17) followed by 1.1121 (weekly high Mar.10) and finally 1.1251 (55-day SMA). On the other hand, a drop below 1.0900 (weekly low Mar.14) would target 1.0805 (2022 low Mar.7) en route to 1.0766 (monthly low May 7 2020).