- EUR / USD is consolidating near 1.2300 as traders look at the risk of incoming events.
- US politics (the result of the Georgia Senate race) and data (ISM PMI and NFP services) are in the spotlight.
- Reflation trading appeared to weigh on the US dollar and help EUR / USD on Tuesday.
He EUR/USD it is trading near the highs for the day, but has largely failed to break above the 1.2300 level. Currently, the pair is trading with gains of around 0.4% or around 50 pips.
In fact, in recent days, the pair has struggled to hold at 1.2300, unable to close above it on Monday and last Wednesday. That implies that if there is a breakout above this level in the next few hours, it could be more aggressive (maybe some stops will be triggered, for example).
A breakout above the 1.2300 level would give the pair a clean run at the 1.2400 level, given the lack of notable resistance levels before this point. 1.2400 formed solid resistance in April 2018, and is likely to present a decent barrier again, but should this level rise, a higher run towards the 2018 highs is likely in the mid-1.2500s. Given the current bearish USD environment, as traders are betting on an improvement in global economic and trading conditions, as well as reflation in 2021 and beyond, many will be targeting this level.
Four hour chart
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