EUR/USD Forecast: Higher highs at sight

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2072

Investors are trying to digest US stimulus talks, Brexit woes and covid vaccine news.
US ADP survey came in worse than anticipated in November, printing at 307K.
EUR/USD bullish case remains firmly in place as the pair pressures the 1.2085 resistance.

Financial markets are quite volatile this Wednesday, as investors have plenty to digest. The US Congress has revived the need for a stimulus package, although the news came from a group of bipartisan lawmakers, without leaders’ involvement at the time being. US Treasury Secretary Steve Mnuchin also mentioned the need to resume COVID-19 relief talks in his testimony before the Senate. Majors trade mixed, with EUR/USD holding well above the 1.2000 mark.

In the meantime, the UK approved the Pfizer´s vaccine emergency use and will shortly start applying it. Also, Brexit tensions mount, as EU’s chief negotiator Michel Barnier repeated that critical issues involving fisheries and a level playing field remain unsolved.

Germany published October Retail Sales, which surprised to the upside, surging 2.6% MoM and 8.2% YoY. The EU released the October Producer Price Index, which beat expectations rising by 0.4% in the month. As for the US, the country has just published the November ADP survey on private job creation. According to it, private payrolls rose by 307K, below the 410K expected and the previous 365K

EUR/USD short-term technical outlook

The EUR/USD pair is trading in the 1.2060 price zone, near a fresh yearly high of 1.2087. The pair is biased north according to intraday technical readings. The 4-hour chart shows that the pair keeps developing well above bullish moving averages, with the 20 SMA accelerating higher around 1.1980. The Momentum indicator resumes its advance after correcting lower, while the RSI remains within overbought readings without exhaustion signs. Further gains are expected on a clear break above 1.2085, as the pair set a monthly high at 1.2083 in May 2018.

Support levels: 1.2025 1.1980 1.1940

Resistance levels: 1.2085 1.2130 1.2175

View Live Chart for the EUR/USD

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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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