The pieces of the puzzle seem to be coming together for the Euro in the long term. The Dutch election risks are past us, in France, Le Penn is losing ground against Macron and nothing is expected to change in Germany in relation to the EU.
That´s the first half of the puzzle – the other half is the real economy. The EU economy has probably suffered the most since the 2008 global financial crisis, but it looks like now everything is falling in to place.
The Eurozone service and manufacturing numbers were just released and they were frankly amazing. We have seen the EU economy quickly pickup in the last 6 months and it´s gaining pace.
Looking at the economic calendar, it´s all green (apart from Japanese manufacturing PMI), so today´s German, French and the EU service and manufacturing reports beat the expectations once again. These are the best numbers we have seen in the last 6 years or so, which make these reports even greater.
The EU economy climb up mount Everest
It´s great to see the European economy get back on its feet. This will hopefully help pull the UK economy along when Brexit starts and we see what disaster unfolds. So that's two major economies moving along nicely, the EU and US. This will make it easier for them to pull the rest of the globe along. If China and the emerging markets got back on their feet again, it would help even more because these are the four major global economic blocs on the planet right now.
The Euro took off and EUR/USD broke above the 1.08 resistance level once again, but 1.0820 still remains intact. In the long term, as we said, the pieces are coming together for a big Euro reverse.
Have we seen the bottom in EUR/USD? I can't be certain because we might get another quick dip due to parity, but the case is building up for the Euro in the longterm and it´s getting stronger by the day.