EUR/USD clinches fresh tops around 1.2300

EUR/USD remains firm and tests the 1.2300 yardstick.
The selling bias around the greenback fuels the upside.
German, EMU Manufacturing PMI remained robust in December.

Pablo Piovano FXStreet

The upside momentum in the single currency remains well and sound at the beginning of the new year and pushes EUR/USD to fresh tops in the 1.2300 neighbourhood.

EUR/USD underpinned by risk-on mood

EUR/USD trades on a firm note in the first session of 2021 and approaches the key barrier at the 1.2300 mark against the backdrop of the continuation of the sell-off in the dollar.

Indeed, investors continue to favour the riskier assets amidst solid prospects of a sharp economic rebound this year. This view remains sustained by the looser stance of many G10 central banks and rising hopes following the vaccine rollout.

Data wise in Euroland, the final December Manufacturing PMI came in a tad lower than the preliminary reading at 55.2, while the German gauge followed suit at 58.3 vs. 58.6 from the advanced data.

What to look for around EUR

The upside momentum in EUR/USD regains fresh oxygen at the beginning of 2021 and is now refocused on the 1.2300 mark. So far, EUR/USD appears supported by prospects of a strong recovery in the region (and abroad) along with extra fiscal stimulus in the US as well as the accommodative stance from the ECB.

EUR/USD levels to watch

At the moment, the pair is gaining 0.68% at 1.2298 and a breakout of 1.2310 (2020 high Dec.30) would target 1.2413 (monthly high Apr.17 2018) en route to 1.2476 (monthly high Mar.27 2018). On the other hand, the next support emerges at 1.2129 (weekly low Dec.21) seconded by 1.2058 (weekly low Dec.9) and finally 1.2032 (23.6% Fibo of the 2017-2018 rally).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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