- EUR/USD pushes higher and approaches 1.2200.
- Broad-based risk appetite continues to hurt the dollar.
- US Initial Claims bettered estimates at 712K WoW.
The upside pressure in the shared currency picks extra pace on Thursday and motivates EUR/USD to clinch fresh tops in the vicinity of 1.2170.
EUR/USD stronger on risk appetite
Following a brief test of lows in the 1.2100 neighbourhood earlier in the session, EUR/USD manages to regain attention and is now flirting with recent tops in the 1.2160/70 band.
Solid risk-on sentiment keeps fuelling the selling mood in the greenback and drags the US Dollar Index (DXY) to levels last seen in April 2018 in the 90.60 zone so far. Indeed, US stimulus hopes and vaccine optimism sustain the strong growth prospects for the next months, while apparent auspicious Brexit headline also collaborate with the upbeat sentiment in the risk complex.
In the US docket, US Initial Claims surprised to the upside at 712K WoW, while the US ISM Non-Manufacturing and Markit’s Services PMI are due later in the NA session.
Earlier in Euroland, November’s final Services PMI in the core Euroland (France, Germany and the euro area) remained within the contraction territory (below the 50 threshold) and Retail Sales in the bloc expanded 1.5% MoM in October.
What to look for around EUR
Another day, another top in EUR/USD. In fact, this time the pair managed to leave behind the 1.2100 barrier and clinched peaks in levels last seen in April 2018 near 1.2140, always against the backdrop of a favourable atmosphere in the risk complex. In the very near-term, EUR/USD appears supported by prospects of a strong recovery in the region along with the increasing likelihood of extra stimulus in the US. Risks to this positive view emerge from the potential political effervescence around the EU Recovery Fund and increasing chances of further ECB easing to be announced as soon as at the December meeting.
EUR/USD levels to watch
At the moment, the pair is gaining 0.31% at 1.2150 and a breakout of 1.2168 (2020 high Dec.3) would target 1.2413 (monthly high Apr.17 2018) en route to 1.2476 (monthly high Mar.27 2018). On the downside, the next support is located at 1.1920 (high Nov.9) seconded by 1.1800 (low Nov.23) and finally 1.1745 (weekly low Nov.11).
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