- EUR / USD has been limited near the 1.2180 level earlier on Tuesday.
- Investors continue to focus attention on yields, US politics and the pandemic.
After a failed attempt to advance to the 1.2200 region, EUR / USD returns to the 1.2150 region where it now seeks to consolidate.
EUR / USD focuses attention on Fed speeches, data and risk trends
EUR / USD now alternates gains and losses by a general consolidation tone in global markets, while investors continue to assess the progress of the coronavirus pandemic in the face of the current vaccine launch, new blocking measures from China and a possible extension of current restrictions in Germany.
Meanwhile, the optimistic tone of US yields appears to be the main driver of the recent corrective rise in the dollar, while Several Fed members recently hinted at the idea that the Federal Reserve could begin to reduce its bond buying program by the end of the year.. On this, market participants are likely to assess how credible this new phase-down version is over the next few weeks.
There was no release of relevant data in the euro zone on Tuesday, apart from the almost 7% monthly contraction of Italian retail sales during November. On the other side of the Atlantic, the NFIB index has fallen below expectations at 95.9, the IBD / TIPP index has exceeded them by 50.1 and JOLTs job openings have fallen below expectations by 6.52 million.
Later, Atlanta Fed Governor R. Bostic, FOMC L. Brainard, Dallas Fed Governor R. Kaplan, Cleveland Fed Governor L. Mester, and Fed Governor from Kansas City, E. George, have a few speeches scheduled and will draw the attention of investors.
What can we expect around the EUR?
EUR / USD bullish momentum petered out at the 1.2350 region earlier in the month. Despite the downward correction, the outlook for EUR / USD remains constructive and appears supported by prospects for a strong recovery in the region (and abroad), which in turn is underpinned by additional fiscal stimulus. by 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 common currency.
EUR / USD levels
At the time of writing, the EUR / USD pair is gaining 0.01% on the day, trading at 1.2150. A break above 1.2349 (Jan 6 high) would target 1.2413 (Apr 17, 2018 high) en route to 1.2476 (Mar 27, 2018 high). On the other hand, immediate support is at 1.2132 (January 11 low), followed by 1.2058 (December 9 low) and finally 1.2032 (23.6% Fibonacci retracement of the 2017-2018 movement).
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