EUR/USD hits weekly tops near 1.1420 as USD selling remains unabated

• Broad-based US dollar sell-off lifts EUR/USD through 1.1402 – key level.
• Technical set up points to further upside bias, with 1.1470/80 next targets.    

The EUR/USD pair built on Monday’s recovery and went onto hit fresh weekly tops beyond the key 1.1402 upside barrier, as the USD bears remain unstoppable amid increasing doubts over the US-China trade truce and falling Treasury yields.

Despite the risk-off sentiment, the US dollar remains heavily sold-off across the board, tracking the sell-off in the Treasury yields across the curve, as A sharp drop in the US ISM price paid index is likely weighing over the yields.

“The US ISM manufacturing index released yesterday showed the activity accelerated in November with growth in new orders, production and employment. The ISM’s Prices Index, however, fell by a sharp 10.9 points to 60.7%, after October’s reading of 71.6%, indicating a lower rate of inflation. That inflation slowdown is likely dragging the treasury yields lower,” FXStreet’s Analyst Omkar Godbole noted.

On the EUR-side of the equation, the ongoing efforts underway by the Italian government to get the Budget approved by the EU remains somewhat EUR-supportive. Note that, the Italian Ministers are open to a budget deficit target of 2%, with the Budget proposal likely to be present to the EU shortly.

In the day ahead, the spot will continue to remain influenced by the USD dynamics and broader market sentiment amid a thin-EUR and US docket. Meanwhile, the speech by the FOMC member Williams could offer some near-term trading impetus.

EUR/USD Technical Levels