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  • EUR/USD remains bid although below the 1.2300 mark so far.
  • Investors’ attention stays on the vote counting in Georgia.
  • US ISM Manufacturing will be in the centre of the debate later.

The shared currency manages to keep the buying note unchanged vs. the greenback, although EUR/USD still struggles to re-test/surpass the 1.2300 yardstick.

EUR/USD looks to US politics, data

EUR/USD extends the optimism at the start of the year, always against the broader constructive note in the risk-associated galaxy.

In the meantime, sellers continue to keep the buck under pressure, sending the US Dollar Index (DXY) to levels last seen in April 2018 amidst a huge dose of US stimulus and real interest rates favouring Euroland vs. the US.

Later in the session, investors will closely follow the developments from the Georgia vote, where the control of the US Senate will be at stake.

In the euro calendar, German Retail Sales expanded at a monthly 1.9% during November, while the Unemployment Rate stayed unchanged at 6.1% and the Unemployment Change dropped by 37K for the month of December. Data from the ECB showed M3 Money Supply expanded 11.0% on a year to November and Private Sector Loans expanded 3.1% YoY.

In the US docket, the December’s ISM Manufacturing is due later seconded by speeches by FOMC’s Evans and Williams and the API’s report on crude oil inventories.

What to look for around EUR

The upside momentum in EUR/USD regains fresh oxygen at the beginning of 2021 and is now focused on the 1.2300 mark. So far, EUR/USD appears supported by prospects of a strong recovery in the region (and abroad), which is in turn underpinned by extra fiscal stimulus by the Fed and the ECB. In addition, real interest rates continue to favour the euro area vs. the US, which is also another factor supporting the EUR.

EUR/USD levels to watch

At the moment, the pair is gaining 0.22% at 1.2270 and a breakout of 1.2310 (2020 high Dec.30) would target 1.2413 (monthly high Apr.17 2018) en route to 1.2476 (monthly high Mar.27 2018). On the other hand, the next support emerges at 1.2129 (weekly low Dec.21) seconded by 1.2058 (weekly low Dec.9) and finally 1.2032 (23.6% Fibo of the 2017-2018 rally).