The EUR/USD reached a daily low of 1.3188 during the Asian session, mounted on a risk aversion rally triggered past American session when negotiations on US Fiscal Cliff took a step back. Dollar gained as stocks fall, yet Friday is seeing bearish downward momentum returning for the greenback. The EUR/USD however, remains caped below 1.3250 immediate resistance level, approaching to the level after bouncing in its 4 hours 20 SMA. The upward momentum remains clear, as indicators head north above their midlines, having already corrected extreme overbought readings.
Market will likely remain slow ahead of US final GDP readings, along with housing and manufacturing data later today, yet once above mentioned resistance, there is scope for an advance back towards 1.3310 area. Once above, the rally may slowly but steadily extend towards 1.3385, past March monthly high.
Below 1.3180 risk turns to the downside, with a deeper correction then at sight, back towards the 1.3120 price zone.View Live Chart for EUR/USD