EUR/USD Price Analysis: Bulls await a move beyond 1.1015 before placing fresh bets
- EUR/USD continues to draw support from the divergent ECB-Fed policy outlook.
- The technical setup favours bullish traders and supports prospects for further gains.
- Some follow-through buying beyond the 1.1015 area will reaffirm the positive bias.
The EUR/USD pair trades with a positive bias for the fifth day in a row on Friday and is currently placed just below the 1.1000 psychological mark, or a two-week high touched the previous day.
The shared currency continues to draw support from the fact that the European Central Bank (ECB) on Thursday reaffirmed the need to hold interest rates higher for longer. In contrast, the Federal Reserve (Fed) indicated that rate cuts are likely next year and drag the US Dollar (USD) to over a four-month low during the Asian session, which, in turn, is seen acting as a tailwind for the EUR/USD pair.
From a technical perspective, spot prices showed some resilience below the 100-day Simple Moving Average (SMA) earlier this week. A subsequent rally of over 250 pips from the 1.0740 region, or a near one-month low favours bullish traders. Moreover, oscillators on the daily chart are holding comfortably in the positive territory and validate the near-term constructive outlook for the EUR/USD pair.
That said, it will still be prudent to wait for some follow-through buying beyond the 1.1015 area, or a multi-month peak touched in November, before positioning for any further gains. The EUR/USD pair might then accelerate the momentum towards the 1.1065 region (August monthly top) before aiming to reclaim the 1.1100 mark and test the next relevant hurdle near the mid-1.1100s (July 27 high).
On the flip side, the 1.0945 region now seems to protect the immediate downside, below which the EUR/USD pair could slide back to test sub-1.0900 levels. Some follow-through selling will negate the positive outlook and drag spot prices to the 200-day SMA support, currently near the 1.0830-1.0825 area. The subsequent fall below the 1.0800 mark could expose the 100-day SMA, around the 1.0755 zone.
EUR/USD daily chart
Technical levels to watch
(This story was corrected on December 15 at 08:45 GMT to say, in the third paragraph, that EUR/USD rallied over 250 pips, not 25 pips, and to say, in the last paragraph, that some follow-through selling will negate the positive outlook, not follow-through buying.)
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
