EUR/USD holds firm above 1.0820 with limited rallies

• The dollar falls modestly throughout the market on Friday.
• EUR/USD remains in a recent range, not moving away from the high in months.

EUR/USD is modestly rising for the second day in a row, with limited range. The pair climbed to 1.0858, hitting a two-day high, and then pulled back, halting the decline above 1.0820.

The intraday bias looks bullish on EUR/USD, in line with the current trend. On the upside, the 1.0870 area is resistance to watch, which, if exceeded, would enable a test to the maximum in months reached 1.0887, on Wednesday. In the opposite direction, at 1.0820 the first support appears where the daily lows are and then 1.0780 follows. A confirmation clearly below this last level would warn of a deeper correction.

Lagarde wants to stay the course

The EUR/USD advance comes amid widespread dollar weakness on Friday, although the worst in the G10 is being the yen. The greenback’s decline looks constrained for now as it is supported by a rise in Treasury yields. Those of European bonds also advance.

European Central Bank President Christine Lagarde said on Friday that her “mantra” on current monetary policy is to “stay the course.” She did it by speaking at the Davos world forum, in a panel that she shares with Kristalina Georgieva (International Monetary Fund) and Haruhiko Kuroda (Bank of Japan). Lagarde’s comments did not represent anything new and therefore the euro remained calm.

The wholesale inflation in Germany It slowed down in December but not as much as expected. The Producer Price Index fell 0.4% in the month, less than the expected fall of 1.2%. The annual rate decreased from 28.2% to 21.6%.

The economic calendar shows ahead the US existing home sales report as relevant data. Traders will be closely watching what happens in the bond market and also on Wall Street.

technical levels