- Sentiment lifted by the German Ifo sentiment data.
- Will DXY sustain the recovery?
- German politics and Fedspeaks in focus.
The EUR bulls took a breather in Asia, leaving the EUR/USD pair in a consolidative mode near two-month tops of 1.1944, as focus shifts towards the Eurozone flash CPI estimate, US growth numbers and Fedspeaks due on the cards later this week for fresh trading impetus.
EUR/USD: Risks minor correction before further upside?
The sentiment around the Euro remains buoyed by the optimism over the Eurozone growth story, especially, after last week’s solid flash manufacturing PMI reports and the German business climate numbers for November.
Moreover, easing political worries surrounding the German political climate, after Merkel’s conservative party agreed on Sunday to pursue a “grand coalition” with the SPD, will also remain EUR-supportive in the week ahead.
Meanwhile, the major also benefits from the ongoing broad USD weakness, as the Treasury yield curve flattening continues with 10 yr-2yr spread at 59 basis points, the lowest since Oct. 2007.
Attention now turns towards the US new home sales data and FOMC member Kashkari’s speech due later today, as markets gear up for a data-heavy calendar this week.
EUR/USD Technical Levels
According to Omkar Godbole, Analyst at FXStreet, “The one-month 25 delta risk reversals gauge rose to a 4-month high of 0.45 on Friday, suggesting increased demand for the EUR calls. It adds credence to the bullish technical breakout on the charts and could yield a move to 1.20 or 1.2092."
Valeria Bednarik, Chief Analyst at FXStreet, explained, “according to the 4 hours chart, the pair is also bullish, despite technical indicators lost upward strength in extreme overbought territory, as the price ended some 15 pips below its high. In this last time frame, the 20 SMA has turned north almost vertically, now around 1.1830, also a strong static support level. Should the advance extend beyond the mentioned high, the pair has room to extend its gains towards the 1.2000 regions, en route to the high of 2015 and this 2017 at 1.2100. Support levels: 1.1890 1.1860 1.1825. Resistance levels: 1.1945 1.1980 1.2015.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.