- EUR/USD re-targets the 1.2000 mark on Tuesday.
- German jobless rate ticked lower to 6.1% in November.
- EMU’s advanced inflation figures next of note in the docket.
The single currency regains the smile and pushes EUR/USD back to the vicinity of the psychological 1.20 mark on Tuesday.
EUR/USD looks to data
EUR/USD reverses Monday’s negative performance and resumes the upside momentum, always targeting the 1.20 mark amidst renewed dollar weakness.
In fact, month-end flows and some profit taking mood forced EUR/USD to recede from an ephemeral surpass of 1.20 the figure at the beginning of the week, ending the session with decent losses.
On the broader scenario, hopes of a strong economic recovery and firm optimism on extra US stimulus keep propping up the generalized upbeat sentiment in the risk-associated galaxy.
Later in the euro docket, EMU flash inflation figures for the month of November will be on top of the docket. Earlier, the German unemployment rate dropped to 6.1% in November, while the final manufacturing PMI came in a tad lower at 57.9 in the same period.
Across the pond, Fed’s Powell will testify before the Senate, while the ISM Manufacturing will take centre stage in the NA session seconded by speeches by FOMC’s Brainard, Daly and Evans.
What to look for around EUR
EUR/USD’s rally briefly surpassed the 1.20 mark on Monday and leaves the door open to a potential test of the 2020 highs near 1.2010 (September 1), 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 0.45% at 1.1976 and a break above 1.2003 (monthly high Nov.30) would target 1.2011 (2020 high Sep.1) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the flip side, immediate contention emerges at 1.1800 (low Nov.23) followed by 1.1745 (weekly low Nov.11) and finally 1.1709 (Fibo level of the 2017-2018 rally).
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