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  • EUR/USD gained traction for the third consecutive session on Wednesday amid weaker USD.
  • The prevalent upbeat market mood continued weighing heavily on the safe-haven greenback.

The EUR/USD pair shot to fresh 32-month tops during the early North American session, with bulls looking to build on the momentum further beyond the 1.2300 mark.

The pair built on the previous day’s bullish breakout momentum through a short-term descending trend-line resistance and gained some follow-through traction on Wednesday. The uptick marked the third consecutive day of a positive move and was exclusively sponsored by sustained US dollar selling bias.

Investors looked past the effective rejection of a measure to raise the direct payments to most US households to $2,000 and remain convinced about the likelihood of additional US financial aid. This, along with hopes for a strong global recovery in 2021, remained supportive of the upbeat market mood.

The already strong risk sentiment got an additional boost after UK regulators approved the use of AstraZeneca/Oxford coronavirus vaccine. This, in turn, was seen as a key factor that continued weighing heavily on the greenback’s safe-haven status and driving the EUR/USD pair higher.

The USD bulls failed to gain any respite from Wednesday’s release of Goods Trade Balance, which showed that deficit rose to $84.8 billion in November. Today’s US economic docket also features Chicago PMI and Pending Home Sales, albeit is unlikely to provide any meaningful impetus to the EUR/USD pair.

It will now be interesting to see if the pair is able to capitalize on the move or bulls opt to take some profits off the table amid relatively thin liquidity conditions on the back of year-end holiday season. That said, the set-up still supports prospects for an extension of the upward trajectory.

Technical levels to watch