- EUR / USD extends Monday’s gains and targets 1.2300.
- The German unemployment rate was unchanged at 6.1% in December.
- ISM’s Manufacturing PMI and US policy will draw investors’ attention later in the day.
The common currency maintains its strength intact so far this week and now pushes the EUR / USD pair to the 1.2280 region, in daily highs.
EUR / USD still capped by 1.2300
EUR / USD is moving positive on Tuesday, although a sustainable breakout of the key 1.2300 barrier still seems elusive for the pair’s bulls despite persistent weakness around the US dollar.
The optimistic sentiment around the pair remains strong for the moment, always with the weak dollar as the main driver of the recent rally. Later on Tuesday, the spotlight is expected to shift to the US political scene, where voting in Georgia takes center stage.
In the economic calendar of the euro, German retail sales expanded 1.9% monthly during November, while the unemployment rate was unchanged at 6.1% and the variation in unemployment was reduced by 37,000 for the month of December. ECB data showed that the M3 money supply expanded 11.0% year-on-year through November and loans to the private sector expanded 3.1% year-on-year.
On the US economic calendar, the December ISM Manufacturing PMI will be today’s featured release, followed by the FOMC’s Evans and Williams speeches and the API report on Crude Oil Inventories.
What can we expect around the EUR?
The bullish momentum in EUR / USD regains strength in early 2021 and is now targeting the 1.2300 level. So far, the EUR / USD pair appears supported by the 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.
EUR / USD technical levels
At the time of writing, the EUR / USD pair is gaining 0.24% on the day, trading at 1.2272. A breakout of 1.2310 (December 30, 2020 high), points to 1.2413 (April 17, 2018 high) en route to 1.2476 (March 27, 2018 high). On the other hand, the next support is at 1.2129 (low of December 21, 2020), followed by 1.2058 (low of December 9, 2020) and finally 1.2032 (23.6% Fibonacci retracement of the 2017-2018 movement) .
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