- EUR / USD loses momentum and falls to the 1.2320 area.
- The German flash CPI stood at 0.5% month-on-month in December.
- The US ADP report fell by 123,000 over the past month.
He EUR/USD remains firm above 1.2300, albeit below initial highs at 1.2350 area.
EUR / USD: Rise limited to 1.2350
EUR / USD is up for the third consecutive session above 1.2300, although it trimmed some of the early gains on a sudden surge of USD strength.
In fact, the dollar gained more traction after the returns of the key benchmark US 10-year index recovered to the 1.04% zone, the area last visited in March 2020.
In the data space, Germany’s flash inflation figures showed that consumer prices are expected to have gained 0.5% in December, while the annual decline is estimated at 0.3%. Across the pond, the ADP report noted that the US private sector lost 123,000 jobs over the past month against expectations for a meager 88,000 increase.
The following will be the Factory Orders, the EIA Report on Crude Oil Supplies and the Minutes from the December FOMC meeting.
What to look for around EUR
EUR / USD bullish momentum regains fresh oxygen in early 2021 and the pair manages to trade beyond 1.2300 for the first time since April 2018. EUR / USD thus far appears supported by prospects for a strong recovery in the region ( and abroad), 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.
Technical levels
At the moment, the pair is gaining 0.05% at 1.2302 and a breakout of 1.2349 (January 6 high) would target 1.2413 (April 17, 2018 monthly high) en route to 1.2476 (March 27, 2018 monthly high). 2018). On the other hand, the next support emerges at 1.2129 (weekly minimum of December 21), followed by 1.2058 (weekly minimum of December 9) and finally 1.2032 (23.6% Fibonacci of the 2017-2018 rally).
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