EUR/USD hits two-week highs above 1.0900 on Franco-German proposal for a recovery fund

• Euro gains momentum after Merkel and Macron back EU fund for recovery.
• EUR/USD hovering around 1.0900, up almost a hundred pips.

The EUR/USD extended gains boosted by a decline of the US dollar across the board on risk-on. Also the announcement that France and Germany proposed for the European Union to raise debt jointly added more strength to the euro.

The pair reached at 1.0913 the highest level since May 5 and it is hovering near the peak, holding a strong bullish tone. EUR/GBP eared losses while EUR/CHF jumped above 1.0550, to the highest in two weeks.

The US dollar is under pressure hit by risk appetite. The DXY is falling 0.65% and bottomed at 99.70. In Wall Street, the Dow Jones gains 3.45% and the Nasdaq 2.38%. Hopes about a vaccine for coronavirus triggered optimism.

More recently, equity prices rose even further after German Chancellor Merkel and French President Macron announced a recovery fund of around 500 billion euros for the recovery of the coronavirus crisis. Macron said it will be grants and not loans.

Technical levels