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The EUR/USD pair hovers around 1.2210 ahead of the US opening, retreating from an early high of 1.2250, but the bearish scope is still limited, according to FXStreet’s Chief Analyst Valeria Bednarik.

Key quotes

“The market is trying to digest the latest news coming from the US, as, on Sunday, US President Donald Trump signed the coronavirus relief and government funding bill. Trading is thin amid the winter holidays in the northern hemisphere and the shortened weeks of Christmas and Year-End. A holiday in the UK has exacerbated range trading.”

“The EUR/USD pair has a limited bearish scope according to intraday technical readings. The 4-hour chart shows that an intraday slide met modest buying interest around a flat 20 SMA. The longer moving averages remain below the current level, maintaining their bullish slopes.”

“Technical indicators have turned lower but remain within positive levels, reflecting the latest decline instead of suggesting another leg lower.”