- EUR / USD faced a rejection near 1.2200 and fell around 35-40 pips from daily highs.
- A modest rally in the USD prompted some selling, although the decline remained limited.
- Macroeconomic releases from the United States on Wednesday did little to provide a significant boost to the pair.
The pair EUR/USD It fell around 35-40 pips from the daily swing highs and has now fallen to the lower end of its intraday trading range, around the 1.2170-60 region.
The pair was unable to capitalize on its initial gains at 1.2200, but instead encountered new offers during the middle of the European session amid a positive rally in the US dollar. However, the USD rally lacked an obvious fundamental catalyst and risks fading quickly amid positive trade sentiment in equity markets.
Investors ignored US President Donald Trump’s threat not to sign a $ 892 billion COVID-19 stimulus bill for a long time, instead following signs of the reopening of the border between the Kingdom. Kingdom and France. The move marked a step back to normal after the discovery of a new variant of the coronavirus and could undermine the dollar’s safe-haven demand.
Meanwhile, the EUR / USD pair had a rather subdued reaction to the mixed macroeconomic data from the US According to data released on Wednesday, Durable Goods Orders posted stronger than expected growth of 0.9% in November. Meanwhile, underlying durable goods orders, which exclude transportation items, fell short of market expectations and were up 1.1%.
On the other hand, the initial weekly Unemployment Claims came to show that the number of Americans applying for unemployment related benefits dropped to 803,000 during the week ending December 18. This was well below consensus estimates that pointed to a reading of 885,000 and the upward revision of 892,000 from the previous week, although it did little to impress the USD bulls.
Now it will be interesting to see if the EUR / USD is able to attract new purchases or if it falls to challenge weekly swing lows, around the 1.2130 region. A sustained break below will be seen as the first signs of bullish exhaustion and will make the pair vulnerable to extend this week’s retracement drop from highs of more than two and a half years, around the 1.2270-75 region.
Technical levels
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