EUR/USD stuck in familiar range, awaits US stimulus and Eurozone PMIs

• EUR/USD’s recent trading range intact despite the US stimulus optimism. 
• The US Congress vows to break the fiscal impasse before the year-end.
• Eurozone PMIs could show a renewed coronavirus-induced economic slowdown. 

While EUR/USD has gained some positive traction, it is yet to exit its recent trading range of 1.2059 to 1.2178. 

Stimulus hopes weigh over USD

The pair is currently trading 0.10% higher on the day at 1.2162, and the dollar is trading near 32-month lows against majors. 

The US Congress leaders’ vowed to break the long-standing impasse on the coronavirus relief package during the Asian trading hours, inviting selling pressure for the safe-haven US dollar. So far, however, the policymakers have remained silent on how discussions are progressing. 

Stimulus, if approved, would be bearish for the US dollar. The improved prospects of additional easing could keep the EUR/USD better bid in the run-up to the German and Eurozone PMI numbers, scheduled for release later today. 

“Recent lockdowns should drive PMIs lower, but the expectations component of IFO could rise on vaccine optimism,” BK Asset Management’s Kathy lien noted. “Even if it does, the German government’s decision to go into nationwide lockdown until Jan. 10 is a big problem for their economy and in turn the euro.”

Weaker-than-expected PMIs could have a bearing on EUR/USD, more so, as its technical charts are showing signs of bull fatigue around 1.2170. The US Retail Sales data and the Federal Reserve rate decision could also influence the pair. 

Technical levels