- EUR / USD loses control and is trading at levels below 1.2300.
- The recovery of the dollar weighs on the pair and the riskiest assets.
The single currency is under pressure and forces the EUR / USD to pull back below the 1.2300 mark in the second half of the week.
EUR / USD weakened by the recovery of the USD
EUR / USD turns negative after three consecutive daily gains and falls back below 1.2300, amid a moderate rebound in the dollar on Thursday.
Indeed, the dollar is picking up a renewed pace alongside the robust recovery in US yields to multi-month highs past the critical 1.0% hurdle.
The recent rally in the pair came amid a persistent rise in open interest in the EUR futures markets, supporting additional gains in the near term.
On another front, Joe Biden received the green light from the United States Congress to become the next President of the United States on January 20, following Wednesday’s incidents in Washington.
On the US calendar, the focus will be on weekly jobless claims, ISM non-manufacturing, and speeches by FOMC members Evans, Bullard and Harker.
What to look for around EUR
EUR / USD bullish momentum has been exhausted at the 1.2350 area for the time being. So far, the pair appears supported by the prospects for a strong recovery in the region, which in turn is supported by additional fiscal stimulus from the Fed and the ECB. Furthermore, real interest rates continue to favor the euro area versus the US, which is also another factor supporting the euro alongside the huge long-term positioning in the speculative community.
EUR / USD levels
At the moment, the pair is back 0.32% at 1.2284 and faces a immediate support at 1.2129 (weekly minimum on December 21) seconded by 1.2058 (weekly minimum on December 9) and finally 1.2032 (23.6% of Fibo from the 2017-2018 rally).
On the other hand, a break of 1.2349 (2021 high marked on January 6) would target resistance 1.2413 (monthly high on April 17, 2018) en route to 1.2476 (monthly high on March 27, 2018).
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