EUR/USD sticks to gains near 6-week tops

Haresh Menghani FXStreet

• Solid German IFO report provides an additional boost.
• Surging US bond yields capping additional gains.
• Strong follow-through momentum needed to confirm a fresh bullish break.

The EUR/USD pair held on to its upbeat German IFO-led up-move near 6-week tops and might now be eyeing a fresh bullish breakout above the 1.1870-80 region.

The pair's up-move from one-week lows touched on Tuesday, got an additional boost today's release of German IFO business climate index, which surpassed expectations and touched a fresh all-time high level of 117.5 for November.

However, surging US Treasury bond yields helped the key US Dollar Index to hold its neck just above 5-week lows (93.00 mark) and capped additional gains, at least for the time being.

It would now be interesting to see if the pair is able to break through 1.1875-80 barrier or some profit-taking kicks in amid the prevalent political uncertainty in the Euro-zone's largest economy, Germany, and ahead of the weekend.

The US economic docket features the release of flash manufacturing and services PMI prints but seems unlikely to trigger any meaningful momentum on the last trading day of the week.

Technical levels to watch

Momentum beyond the above-mentioned hurdle could get extended towards the 1.1900 handle, above which the pair seems all set to aim towards conquering the key 1.20 psychological mark.

On the flip side, 1.1835 level now seems to protect the immediate downside and any subsequent retracement is likely to find fresh buying interest near the 1.1800 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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