- EUR/USD trades in the red around the mid-1.2100s.
- The dollar remains bid helped by higher US yields.
- ECBs Lagarde comes up next in the docket.
The selling bias around the shared currency stays well and sound and keeps EUR/USD depressed well below 1.22 the figure as the European session draws to a close.
EUR/USD focused on data, USD-performance
EUR/USD remains on its way to close the third consecutive daily decline, always against the backdrop of the broad-based rebound in the buck.
As usual in past sessions, the (high) probability of extra US fiscal stimulus under a Democrat presidency lends support to the view of higher inflation in the medium/longer term, which in turn morphs into further upside pressure in US yields, ultimately benefiting the buck.
News from the euro calendar saw the Sentix index improving to 1.3 for the current month, showing a better mood in the investors’ morale.
Later, ECB’s C.Lagarde will participate in a discussion panel at the One Planet Summit in Paris. Across the pond, FOMC’s voter R.Bostic is due to speak in an otherwise empty calendar.
What to look for around EUR
The upside momentum in EUR/USD run out of steam in the 1.2350 area earlier in the month. In spite of the corrective downside, the outlook for EUR/USD remains constructive and 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 along with the huge, long positioning in the speculative community.
EUR/USD levels to watch
At the moment, the pair is retreating 0.57% at 1.2149 and faces immediate contention 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). On the other hand, a breakout of 1.2349 (2021 high Jan.6) would target 1.2413 (monthly high Apr.17 2018) en route to 1.2476 (monthly high Mar.27 2018).
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