- EUR/USD reverses the recent downside and targets 1.1900.
- German IFO came in above estimates in November.
- US Consumer Confidence, housing sector take centre stage later.
The improved tone in the single currency lifts EUR/USD to fresh daily highs in the 1.1890 region.
EUR/USD looks to 1.1900 and above
EUR/USD manages to reverse two consecutive daily pullbacks and regains upside traction on Tuesday.
The renewed weakness surrounding the greenback sustains the resumption of the upside momentum in spot amidst a broad-based improvement in the risk complex. Rising hopes on an efficient vaccine plus the view of a “V”-shaped recovery continue to lend support to the pair and the rest of its risk-associated peers.
Adding to the euro’s bullish note, the German Business Climate tracked by the IFO survey surpassed estimates at 90.7 in November albeit it came a tad below the October’s reading. Earlier in the session, the German GDP figures showed the economy expanded 8.5% during the July-September period, bettering expectations.
Across the ocean, the Conference Board will publish its Consumer Confidence gauge seconded by the S&P/Case-Shiller Index and the FHFA’s House Price Index. In addition, FOMC’s Bullard, Clarida and Williams are also due to speak.
What to look for around EUR
EUR/USD was rejected from the area just above 1.19 the figure at the beginning of the week. In the very near-term, EUR/USD is expected to remain under scrutiny on the back of the impact of the pandemic on the region’s economy and political developments surrounding the EU Recovery Fund. In addition, the dovish stance from the ECB and the potential announcements of extra stimulus in December also favour the re-emergence of the cautious stance among investors.
EUR/USD levels to watch
At the moment, the pair is gaining 0.35% at 1.1881 and a break above 1.1920 (monthly high Nov.9) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1). On the flip side, immediate contention aligns at 1.1745 (weekly low Nov.11) followed by 1.1709 (Fibo level of the 2017-2018 rally) and finally 1.1602 (monthly low Nov.4).
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