EUR/USD analysis: EUR bulls refuse to give up

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1854

EUR/USD higher despite resurgent dollar ahead of tax reform-bill vote.
Macroeconomic data having a limited impact in terms of price action.

The American dollar recovered its charm temporarily during the US afternoon, edging higher against all of its major rivals except the EUR. The common currency refused to give up despite mixed local data and strong US one, holding steady above the 1.1800 level for most of the last two sessions. The German IFO survey released early Europe showed that business confidence eased in December, with the index down to 117.6 from 117.2, still at record highs, weighed by a decrease in expectations, which resulted at 109.5 from previous 111.00. The EU labor cost report for Q3 showed a modest advance of just 1.6%, below previous 1.8% and the expected 2.0%, while construction output in the Union fell by 0.4% MoM in October. The softer tone of equities, which trimmed early gains ahead of the US tax reform vote, helped the common currency to remain afloat. US data, on the other hand, beat expectations, with housing starts up in November 3.3%, to an annualized rate of 1.297M, while building permits decreased by 1.4% in the same month, much better than the 4.9% slide expected.

The EUR/USD pair surged to its highest for the week, trading at the upper end of the past 2-week's range, limited by 1.1715 and the 1.1870 region, with a clear upward potential according to technical readings in the 4 hours chart, as the price has managed to advance above all of its moving averages that anyway continue lacking directional strength, while technical indicators gained momentum upward above their mid-lines. Still, selling interest has been capping the upside at the mentioned 1.1870 level since early December, and would take a clear break above it to consider a possible upward extension afterward. The US tax reform vote in the US Congress that could take place well after Wall Street's close, however, can give the greenback an unexpected boost that is yet to be seen if it could be sustainable.

Support levels: 1.1800 1.1750 1.1715

Resistance levels: 1.1870 1.1900 1.1940

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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