Forex Today: Optimism leads, but would it last?

Valeria Bednarik FXStreet

What you need to know on Wednesday, December 8:

Markets were more active on Tuesday, with optimism leading the way. Hopes that the Omicron coronavirus variant is milder and won’t interrupt the economic comeback sent global equities well into the green. Nevertheless, it’s too early to say how things will turn out with the new COVID-19 strain.

The EUR was the weakest USD rival, while the AUD and the CAD were the strongest. EUR/USD fell to 1.1227, its lowest for December, following the release of unimpressive EU data. The GBP/USD pair neared its yearly low, bouncing modestly ahead of the close to settle at around 1.13230.

EU data failed to impress, as the EU Q3 Gross Domestic Product was confirmed at 2.2% QoQ. On the other hand, the German ZEW showed that Economic Sentiment improved in Germany and the EU in December, although the assessment of the current situation plummeted to -7.4 vs the 5 anticipated by markets.

AUD/USD trades around 0.7110, underpinned by rallying equities and an optimistic RBA. USD/CAD is down to 1.2650, as oil prices kept rallying, with WTI near $72.00 a barrel.

The dollar advanced modestly against safe-haven CHF and JPY, with the pairs confined to tight intraday ranges.

Gold ticked higher but held within familiar levels at around $1,785 a troy ounce.

US Treasury yields surged on the back of the market’s optimism, with the 10-year Treasury note yielding 1.48% by the end of the day.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.