EUR/USD: The 1.20 level is just around the corner

EUR/USD keeps its march north unabated on Monday.
Dollar-selling keeps bolstering the upside in the pair.
German flash CPI came in short of expectations in November.

Pablo Piovano FXStreet

The buying interest around the shared currency stays well and sound and pushes EUR/USD closer to the psychological hurdle at 1.20 the figure on Monday.

EUR/USD now looks to the 2020 high

EUR/USD navigates just pips away from the psychological 1.20 barrier at the beginning of the week.

The firm upside momentum around the pair remains propped up by the unremitting selling pressure hurting the dollar in spite of omnipresent concerns over the advance of the coronavirus pandemic.

In fact, investors keep favouring the “glass half-full” view and look past the ongoing pandemic, anticipating at the same time a “V”-shaped recovery in the global economy. This upbeat sentiment has been gathering extra pace after US President-elect Joe Biden nominated ex-Fed J.Yellen to be Treasury Secretary.

In the data space, German advanced inflation figures showed consumer prices tracked by the CPI are expected to have contracted 0.8% MoM in November and 0.3% on a yearly basis.

What to look for around EUR

EUR/USD’s rally moves closer to the 1.20 yardstick and opens the door to a probable test of the so far 2020 peaks near 1.2020, always against the backdrop of 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 gaining 0.30% at 1.1997 and a break above 1.2000 (psychological level) would target 1.2011 (2020 high Sep.1) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the flip side, immediate contention emerges 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).

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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