- EUR / USD regains its composure and advances to 1.2150.
- The German trade surplus widened a bit to € 18.2 billion in October.
- The markets’ attention remains at the ECB meeting and the EU summit on Thursday.
The common currency seems to have regained its smile after the recent weakness and pushes the EUR / USD pair to the 1.2150 region on Wednesday.
EUR / USD strengthens on strong appetite for risk
After three consecutive daily declines, the EUR / USD attempts to rebound to the 1.2150 region and remains supported above weekly lows around 1.2080 reached on Monday.
In the meantime, widespread improvement in risk appetite remains supported by hopes of economic recovery, especially in response to the recent optimistic news on vaccines, possible additional stimulus in the US and a positive outcome in the Brexit negotiation.
However, it is expected that the common currency remains depressed for the next few hours in light of the ECB meeting and the EU Summit, where the Recovery Fund will be at the center of the debate.
Earlier in the day, economic data showed that German trade surplus rose to € 18.2 billion in October and Spanish industrial production contracted less than expected to 1.6% in the year to October.
Regarding US economic data, during the American session on Wednesday the publication of data from MBA mortgage applications, US wholesale inventories and the JOLTs jobs report stands out. , along with the EIA’s weekly report on US crude oil inventories.
What can we expect around the EUR?
EUR / USD bullish momentum faltered near the 1.22 barrier last week despite favorable sentiment for risk appetite. In the very short term, EUR / USD appears supported by the prospects for a strong recovery in the region coupled with the increasing likelihood of additional stimulus in the US Risks to this positive outlook stem from potential political effervescence around the Fund. of the EU Recovery and the growing chances of further easing measures by the ECB being announced as early as Thursday’s December meeting.
EUR / USD levels
At the time of writing, the EUR / USD pair is gaining 0.18% on the day, trading at 1.2123. A breakout of 1.2177 (December 4 high), would target 1.2413 (April 17, 2018 high) en route to 1.2476 (March 27, 2018 high). On the other hand, the next support is at 1.1920 (November 9 high), followed by 1.1800 (November 23 low) and finally 1.1745 (November 11 low).
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