The selling bias around the greenback remains well and sound during the second half of the week, with EUR/USD now clinching fresh highs in the 1.0640 area.
EUR/USD attention to US data
The pair keeps its weekly advance intact so far today, up for the third session in a row and extending the positive streak for the fourth week, including a rebound off 14-year lows in the mid-1.0300s seen on January 3.
The lack of sustainability in the USD-rally keeps bolstering the upside in spot, despite recent positive results in the US docket and USD-supportive Fedspeak, all pointing towards further tightening by the monetary conditions by the Federal Reserve in the next months.
However, both the latest FOMC minutes and Wednesday’s press conference by president-elect Donald Trump introduced significant uncertainty regarding the future steps of the Trump administration, particularly the ability to boost the economy via fiscal stimulus, all weighing on the buck and driving it lower across the board.
Later in the session, USD could see some recovery in light of the publication of Retail Sales and the preliminary prints of the Reuters/Michigan index, as consensus sees both improving from the previous readings.
EUR/USD levels to watch
The pair is now gaining 0.25% at 1.0638 facing the next hurdle at 1.0647 (55-day sma) ahead of 1.0687 (high Jan.12) and finally 1.0798 (high Dec.5). On the other hand, a breakdown of 1.0508 (low Jan.9) would target 1.0495 (20-day sma) en route to 1.0452 (low Jan.11).
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