EUR/USD snaps 4-day winning streak, gains more than 9% in 2020

• EUR/USD is posting modest daily losses on Thursday.
• Profit-taking ahead of the New Year holiday seems to be weighing on the EUR.
• EUR/USD is up more than 2% for the second straight month in December.

After closing the previous four trading days in the positive territory, the EUR/USD pair edged slightly lower on the last day of 2020 and was last seen losing 0.26% on the day at 1.2265. In November, the pair gained more than 2% and is advancing 2.8% in December. For the year, EUR/USD is up 9.3%.

Earlier in the day, the data from the US showed that Initial Jobless Claims fell by 19,000 to 787,000 in the week ending December 26 and came in much better than the market expectation of 833,000. Nevertheless, the market reaction to this report was largely muted.

The US Dollar Index, which tracks the greenback’s performance against a basket of six major currencies, is virtually unchanged on the day at 89.67.

EUR/USD 2021 outlook

EUR/USD Price Forecast 2021: Euro-dollar long-term bullish breakout points to 1.2750.

“Bulls will get discouraged if the pair loses the 1.2000 threshold, but won’t give up unless the pair falls below 1.1600 in the first quarter of the year, as it will return to levels below the long-term trend line,” says FXStreet Chief Analyst Valeria Bednarik. “In such a case, lower lows will come into play, with the pair poised to extend its decline towards 1.0351, the multi-decade low posted in December 2016.”

Technical levels to watch for