- EUR/USD printed biggest single-day gain in 2.5-months on Monday.
- The uptick has neutralized the immediate bearish setup.
- A breakout, however, may remain elusive due to the US-France trade tensions.
EUR/USD jumped 0.58% on Monday, printing its biggest single-day rise since Sept. 17.
Monday's sharp rise to a 12-day high of 1.1090 has neutralized the immediate bearish setup.
The outlook would turn bullish if the pair rises above the Nov. 21 high of 1.1097. That would confirm a double bottom breakout on the daily chart and create room for 1.12. At press time, the pair is trading largely unchanged on the day at 1.1076.
A breakout looks likely if we take into account the dismal US data released on Monday. The Institute for Supply Management said its manufacturing index sank to 48.1% in November from October's 48.3%, confirming a fourth straight month of contraction.
However, the dollar has already suffered losses in response to the weak data and the focus could shift to the renewed trade tensions, in which case, a breakout may remain elusive.
The Trump administration said late Monday it is planning to impose tariffs up to 100% on around $2.4 billion of French goods in retaliation to France's decision to impose tax on digital services.
On the data front, the Eurozone producer price index is scheduled for release at 10:00 GMT and the US ISM-NY Business Conditions Index (Nov) will hit the wires at 14:45 GMT. These data sets rarely have a big impact on the currency markets. The EUR, however, may take cues from speech by European Central Bank's (ECB) member Benoir Coeure scheduled at 17:30 GMT.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.
Latest Forex News
Editors’ Picks
EUR/USD hits fresh one-month low amid souring market mood
EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points.
GBP/USD retreats toward 1.36 amid fresh dollar strength
GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown.
Gold extends sideways grind near $1,850
The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.
Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed
Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative.
DXY breaks above key downtrend, eyes move above 91.00
USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.