EUR/USD recedes from tops around 1.1940

EUR/USD climbs to new 2-month tops in the 1.1940/45 band.
German GfK Consumer Confidence dropped to -6.7 in December.
French Consumer Confidence eased to 90 in November.

Pablo Piovano FXStreet

The positive momentum around the European currency stays unchanged for yet another session and pushes EUR/USD to new 2-month highs in the 1.1940 region on Thursday.

EUR/USD underpinned by sentiment

EUR/USD managed to advance further and clinch fresh tops in the 1.1940/45 band during early trade, although the bullish move appears to have run out of steam afterwards and prompted sellers to step in.

The recent upside in the pair and the rest of its risk peers was sustained by the persistent downside pressure in the greenback, in turn bolstered by rising hopes of a COVID-19 vaccine, a stronger economic rebound and rising likeliness of extra US stimulus in the short-term.

In the euro docket, the German Consumer Confidence tracked by GfK retreated to -6.7 for the month of December. In France, the same consumer gauge ticked lower to 90 for the current month.

Results from the ECB showed the M3 Money Supply expanded at an annualized 10.5% in October and Private Sector Loans rose 3.1% from a year earlier. Later in the session, the central bank will publish its Accounts of the latest monetary policy meeting seconded by speeches by Board members P.Lane and I.Schnabel.

What to look for around EUR

EUR/USD manages to leave behind the 1.19 mark amidst a favourable atmosphere for the risk complex. In the very near-term, EUR/USD appears supported by prospects of a strong recovery in the region along with the increasing likelihood of extra stimulus in the US. Risks to this positive view emerge from the potential political effervescence around the EU Recovery Fund and increasing chances of further ECB easing to be announced as soon as at the December meeting.

EUR/USD levels to watch

At the moment, the pair is losing 0.07% at 1.1903 and faces immediate contention at 1.1800 (low Nov.23) followed by 1.1745 (weekly low Nov.11) and finally 1.1709 (Fibo level of the 2017-2018 rally). On the upside, a break above 1.1941 (monthly high Nov.26) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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