- The EUR/USD remains firm at three-month highs.
- The US Dollar continues to face pressure due to risk appetite and lower yields.
- The Federal Reserve will release the FOMC minutes on Tuesday.
The US Dollar extended its decline on Monday, boosting the EUR/USD to the highest level in three months near 1.0950. The bias remains tilted to the upside as the US Dollar stay vulnerable.
Market expectations that the Federal Reserve (Fed) is done raising interest rates continue to weigh on the US Dollar, while at the same time, it is being driven by the rise in stock prices on Wall Street. The US Dollar Index (DXY) dropped 0.35% to 103.45, its lowest level since August. The Greenback is still looking for support.
On Tuesday, the Federal Reserve (Fed) will release the minutes of its latest FOMC meeting. In terms of US data, the Chicago Fed National Index and Existing Home Sales are scheduled. In Europe, the upcoming critical report will be the preliminary November PMIs, set to be released on Thursday.
As long as the risk-on environment remains strong, there is a likelihood of further gains in the EUR/USD pair. However, considering that the US economy is outperforming the Eurozone, fundamental factors still support the US Dollar.
EUR/USD short-term technical outlook
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The EUR/USD has risen for the second consecutive day, breaking above the 1.0900 level. The bias remains to the upside, as the price is holding firmly above key Simple Moving Averages on the daily chart. However, the Relative Strength Index (RSI) is above 70, indicating overbought conditions.
On the 4-hour chart, there is still an overbought condition, but there are no major signs of a correction at the moment. Further gains are likely as long as the price remains above 1.0885. If there is a downward slide, the next support level to watch is at 1.0830. On the upside, immediate resistance is around 1.0965, and a break higher would target 1.0990.
View Live Chart for the EUR/USD
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