Search ForexCrunch
  • EUR/USD buoyed by USD, T-yields weakness amid trade uncertainty.
  • Bulls could face rejection at 100-DMA near 1.1095 in the short-term.
  • ECB-speak, Buba monthly report and trade developments next of note.

EUR/USD is seen building on its last week’ s recovery above the 1.1050 level, having hit weekly highs at 1.1065 on mild US dollar weakness across the board. The bulls consolidate the latest uptick, awaiting fresh trading impetus heading into the European open.

EUR/USD: 50-DMA at 1.1042 could cap the immediate downside

The shared currency continues to keep the upper edge against the US dollar for the third straight day on Monday, as a lack of clear signals on the likely US-China trade deal combined with mixed US fundamentals continue to weigh on the US Treasury yields, in turn leaving the greenback depressed vs. its main rivals.

Despite the recent optimistic comments from the both the US and Chinese officials, uncertainty still prevails whether both sides will reach the Phase One of the trade deal or if the US will refrain from the Dec 15 tariff hike. Therefore, the market mood remains dampened, weighing on the risk assets such as the Treasury yields.

On the EUR-side of the equation, the Eurozone October inflation came in as expected, up by 0.7% YoY and core CPI up by 1.1%, which supported the ongoing upbeat momentum in the common currency.

Looking ahead, the bulls target the 100-DMA now located at 1.1093 should the recovery momentum extend. On the flip side, the 50-DMA at 1.1042 could guard the downside if the ECB speakers bolster dovish expectations. However, the US-China trade developments will continue to remain the main market driver.  

EUR/USD Technical levels to consider