EUR/USD bulls climb to fresh highs within the bull cycle, tapping into the 1.09´s

• EUR/USD pops higher and extends the bull cycle in the 1.09´s.
• All eyes will turn top the US PCE data on Friday. 

EUR/USD rallied on easing fears about banking sector troubles and Us stocks on Wall Street have moved higher on encouraging economic signs from the chip industry. In a risk-on setting, EUR/USD has traveled from a low of 1.0823 to a high of 1.0926 so far as investors grew more confident that recent stress in the banking sector would be contained.

The banking turmoil in the collapse of two regional US lenders had sparked concerns about contagion in the banking sector which led to a dramatic shift in monetary policy expectations from the Federal Reserve. Meanwhile,  according to CME Group's Fedwatch tool, bets are now almost equally split between a pause and a 25-basis-point rate hike by the Fed in May,

For further insight, investors are awaiting the February reading of personal consumption expenditures (PCE) on Friday and this is the Fed's preferred inflation gauge. January figures showed a sharp acceleration in consumer spending so the data will be closely eyed. 

Meanwhile, US data on Thursday showed that jobless claims last week rose more than expected from the week before indicating a cooling labor market, while fourth-quarter Gross Domestic Product growth was slightly lower at 2.6% compared with earlier estimates of 2.7%, both supporting the case for a softer Fed policy.