EUR/USD: Dips toward 1.2235 seen as a buying opportunity

EUR/USD bulls took a breather near 32-month tops amid holiday-thinned liquidity conditions but the prevalent bearish sentiment surrounding the USD should help limit any meaningful slide. The pair’s bullish potential is still intact, according to FXStreet’s Analyst Haresh Menghani.

Key quotes

“The US economic docket highlights the only release of the usual Initial Weekly Jobless Claims. The data is unlikely to provide any meaningful impetus. However, the broader market risk sentiment might continue to influence the USD price dynamics and assist investors to grab some opportunities on the last trading day of the year.”

“RSI on the daily chart has moved on the verge of breaking into the overbought territory and warrants some caution for aggressive bullish traders. This makes it prudent to wait for a modest pullback or some near-term consolidation before the next leg up. The next relevant target on the upside is pegged near the 1.2340 level, above which the pair could aim to reclaim the 1.2400 mark in the near-term.”

“Any meaningful pullback might now be seen as a buying opportunity and remain limited near the triangle resistance breakpoint, currently near the 1.2230 region. The mentioned support coincides with another ascending trend-line support, which if broken decisively might prompt some technical selling.”