EUR/USD: Prospects for additional gains toward 1.2340

Sustained USD selling bias pushed EUR/USD to fresh 32-month tops on Wednesday although the momentum ran out of steam near the 1.2300 mark amid thin trading volumes. The next relevant target for bulls is pegged near 1.2340 area, FXStreet’s Haresh Menghani reports.

Key quotes

“Relatively thin liquidity conditions on the back of year-end holidays help investors from placing aggressive bullish bets and kept a lid on any runaway rally for the major. The US economic docket features some second-tier releases and might fail to provide any meaningful impetus. That said, the broader market risk sentiment might influence the USD price dynamics and produce some meaningful trading opportunities.”

“The EUR/USD pair has already confirmed a fresh bullish breakout through a symmetrical triangle and seems poised to appreciate further. With technical indicators holing in the bullish territory and still far from being in the overbought territory, a move beyond the 1.2300 mark, en-route the 1.2340 congestion zone, remains a distinct possibility.”

“Any meaningful pullback below the triangle resistance breakpoint might continue to attract some dip-buying near the 1.2300 mark. The latter coincides with over one-week-old ascending trend-line (part of the symmetrical triangle), which if broken might prompt some technical selling and accelerate the fall back towards the 1.2130-25 support area.”