- EUR / USD bounces from 2-day lows around 1.2245.
- The dollar remains offered as US yields rise above 1.0%.
- Initial US weekly claims. increased 787.00.
He EUR/USD remains in recovery mode after testing lows at 1.2250 at session starts.
EUR / USD weakened by buying USD
EUR / USD is on a 3-day positive streak so far, coming under selling pressure after hitting new highs in the 1.2350 zone on Wednesday, levels last traded almost three years ago.
The new buying mood in the dollar is driven by rising returns from the US 10-year benchmark, managing to break above the key 1.0% level for the first time since February 2020.
On the economic agenda, inflation figures in the euro region showed the lack of traction in consumer prices in December, while Consumer Confidence remained subdued, although slightly better than the previous reading.
In the US, initial claims rose to 787,000 weekly and the US services PMI jumped to 57.2 in December from 55.9 in November, improving on the 54.6 forecast.
What to look for around EUR
EUR / USD bullish momentum has been exhausted at the 1.2350 zone for the time being. So far, the EUR / USD appears supported by the prospects for a strong recovery in the region (and abroad), which in turn is underpinned by additional fiscal stimulus from the Fed and the ECB. Furthermore, real interest rates continue to favor the euro area against the US, which is also another factor supporting the euro along with the huge long-term positioning in the speculative community.
Technical levels
At the moment, the pair is back 0.48% to 1.2264 and faces immediate support at 1.2129 (weekly low of December 21) followed by 1.2058 (weekly low of December 9) and finally 1.2032 (23.6% of the Fibonacci level of the rally 2017-2018). On the other hand, a breakout of 1.2349 (January 6, 2021 high) would point to 1.2413 (April 17, 2018 high) en route to 1.2476 (March 27, 2018 high).
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