- EUR/USD advanced for the fourth consecutive session amid sustained USD selling.
- Disappointing US macro releases did little to provide any respite to the USD bulls.
- Slightly overbought conditions might turn out to be the only factor capping gains.
The EUR/USD pair maintained its strong bid tone through the early North American session and shot to fresh multi-year tops, levels just above mid-1.2200s in the last hour.
The bearish pressure surrounding the US dollar remained unabated on Thursday amid growing prospects for additional US fiscal stimulus measures. In fact, Congressional negotiators were reportedly closing in on a $908 billion COVID-19 relief package.
Apart from this, the optimism over the rollout of vaccines for the highly contagious coronavirus disease and a last-minute Brexit deal remained supportive of the upbeat market mood. The upbeat market mood further undermined the greenback’s safe-haven demand.
The buck remained depressed following Thursday’s disappointing US macro releases – Initial Weekly Jobless Claims and Philly Fed Manufacturing Index. This comes on the back of dovish FOMC statement on Wednesday and did little to provide any respite to the USD.
On the other hand, the shared currency was supported by Wednesday’s data, which indicated that the region’s economy is beginning to stabilize and that the recovery is gaining traction. This, in turn, remained supportive of the EUR/USD pair’s ongoing positive move.
Meanwhile, technical indicators on short-term charts are already flashing slightly overstretched conditions and hold investors from placing fresh bullish bets. This might turn out to be the only factor capping gains for the EUR/USD pair, at least for the time being.
That said, the near-term bias remains tilted firmly in favour of bullish traders. Hence, any meaningful pullback might still be seen as a buying opportunity and remain limited. Nevertheless, the EUR/USD pair seems all set to prolong its recent bullish trajectory.
Technical levels to watch
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