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EUR/USD struggles to gather upside traction despite upbeat China data

  • EUR/USD sidelined near 1.2150 as upbeat China data fails to inspire dollar selling.
  • Coronavirus concerns overshadow vaccine optimism and China data and keep risk under pressure.
  • The options market sees low odds of a continued rally while heading into the year-end.

China data released early Tuesday showed the economic recovery broadened in November. So far, however, that has failed to invite stronger selling pressure for the safe-haven US dollar, leaving EUR/USD marginally higher on the day near 1.2150. The bulls have failed to keep gains above that level in seven out of the last eight trading days. 

China's Retail Sales grew by 5.0% year-on-year in November, marking the fourth successive month of expansion. Industrial Production, a gauge of manufacturing, mining, and utility output, increased 7% year-on-year following October's 5.9% growth. 

An upbeat economic data out of China and other major global economies typically boosts risk appetite and weakens the US dollar. However, the futures tied to the S&P 500 are trading flat at press time, and the dollar is holding ground against major currencies. 

Concerns about increasing COVID-19 deaths and prospects of the economically-painful hard lockdowns could be overshadowing the upbeat China data and optimism about the rollout of coronavirus vaccinations. 

The Eurozone data calendar is light on Tuesday. As such, the pair will be at the mercy of the broader market sentiment during the European hours. Later, the focus would be on the US Export and Import Price Indexes and the US Industrial Production figure. 

EUR/USD's options market shows put options or bearish bets are now drawing higher prices than calls. That's a sign of investors positioning for a potential correction in EUR/USD. Further, technical charts are showing signs of uptrend fatigue. However, the immediate bias would turn bearish only below support at 1.2059. 

Technical levels

EUR/USD

Overview
Today last price1.2153
Today Daily Change0.0006
Today Daily Change %0.05
Today daily open1.2147
 
Trends
Daily SMA201.2003
Daily SMA501.1867
Daily SMA1001.1834
Daily SMA2001.146
 
Levels
Previous Daily High1.2177
Previous Daily Low1.2116
Previous Weekly High1.2166
Previous Weekly Low1.2059
Previous Monthly High1.2003
Previous Monthly Low1.1603
Daily Fibonacci 38.2%1.2153
Daily Fibonacci 61.8%1.2139
Daily Pivot Point S11.2116
Daily Pivot Point S21.2086
Daily Pivot Point S31.2055
Daily Pivot Point R11.2178
Daily Pivot Point R21.2208
Daily Pivot Point R31.2239


 

Author

Omkar Godbole

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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