- Back near 5-DMA of 1.1862.
- Resurgent USD demand caps recovery.
- Focus shifts to US data amid light trading.
The EUR/USD pair continued to find support near 1.1850 levels amid thin liquidity conditions, now looking to retain the bids as attention turns towards the key US datasets due on the cards later today.
EUR/USD: Sell the bounce?
The spot witnessed a choppy session a day before amid a lack of fresh catalysts and slow volumes, as most major markets were closed in observance of Boxing Day holiday. So far this session, the funding currency, Euro, is seen making minor-recovery attempts amid moderate risk-aversion, as markets remain on a cautious footing heading into the New Year.
Also, the recent strength seen across the commodities’ space combined with dismal US durable goods data, core PCE price index and Richmond Fed manufacturing index, undermine the prospects of the Fed rate hike plans next year, which lend support to the main currency pair.
Further, Valeria Bednarik, Chief Analyst at FXStreet, noted: “Beyond thin holiday's trading, the greenback has become unattractive ever since the latest Fed's meeting, and there's little that can change that until February when Powell takes over the presidency of the central bank.“
Later today, the major will await the US CB consumer confidence and pending home sales data release for fresh trading impetus, as the EUR docket is absolutely dry today.
EUR/USD Technical Levels
Bednarik added, “The 4 hours chart for the EUR/USD pair has little to offer, as it retains a neutral stance, albeit with the risk lean towards the upside, as the price develops above all of its moving averages, while also stands above the 61.8% retracement of the December decline between 1.1939 and 1.1717 at 1.1855. Seems unlikely that the pair could see some relevant moves during the rest of the week and ahead of another long weekend, with buying interest probably surging on approaches to the 1.1800 region. Support levels: 1.1855 1.1830 1.1800. Resistance levels: 1.1900 1.1940 1.1975.”
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