- US dollar’s weakness continues to be the key driver in another quiet session.
- EUR/USD rises for the third consecutive day, could close above 1.1200.
The EUR/USD peaked after the beginning of the American session at 1.1220, reaching the highest level since August 13. The pair then pulled back and as of writing it trades at 1.1205, 30 pips above Friday’s close.
US dollar keeps falling ahead of 2020
The greenback is unable to find support and on Monday is losing ground for the fourth session in a row. The US Dollar Index is down 0.21%, about to post the lowest close since July. Despite rising versus the US dollar, the euro hit two months lows against the Swiss franc.
US data released today had no impact in financial markets. Low liquidity conditions reign ahead of the new year. Volatility will likely remain below regular levels until Tuesday’s Asian session. Chinese PMI data is due tomorrow and in the US, more housing data.
Technical outlook
The EUR/USD holds a bullish bias that is likely to remain intact as long as it holds above 1.1180. A consolidation beyond 1.1220 will strengthen the case for more gains, targeting 1.1250.
On a wide perspective, the pair is rising above the 20-week moving average (currently at 1.1195/1.1200) for the first time since May 2018. If it holds it, the medium term bullish outlook for the euro would improve significantly.
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