EUR/USD surpasses the 1.2300 mark on Wednesday. Preliminary German inflation figures come up next. US ADP, FOMC Minutes next on tap across the pond. The single currency extends the rally for yet another session on Wednesday and pushes EUR/USD to fresh yearly tops in the proximity of 1.2350.
EUR/USD boosted by risk-on trade, usd-weakness
EUR/USD clinches its third straight session with gains amidst the generalized and strong presence of sellers around the US dollar. Also exacerbating the offered bias in the greenback, there seems to be increasing chances of a Democrat Congress, as vote counting in Georgia keeps leaning towards candidates Warnock and Ossoff.
In the euro docket, final German Services PMI came in a tad above the flash reading at 47 for the month of December. Later in the European midday, Germany will release its advanced inflation figures, also for the last month of 2020.
Across the pond, the ADP report is due seconded by Factory Orders, the EIA’s report on crude oil supplies and the FOMC Minutes of the December meeting.
What to look for around EUR
The upside momentum in EUR/USD regains fresh oxygen at the beginning of 2021 and the pair manages to trade past the 1.2300 mark for the first time since April 2018. So far, EUR/USD appears supported by prospects of a strong recovery in the region (and abroad), which is in turn underpinned by extra fiscal stimulus by the Fed and the ECB. In addition, real interest rates continue to favour the euro area vs. the US, which is also another factor supporting the EUR along with the huge long positioning in the speculative community.
EUR/USD levels to watch
At the moment, the pair is gaining 0.32% at 1.2335 and a breakout of 1.2345 (2021 high Jan.6) would target 1.2413 (monthly high Apr.17 2018) en route to 1.2476 (monthly high Mar.27 2018). On the other hand, the next support emerges at 1.2129 (weekly low Dec.21) seconded by 1.2058 (weekly low Dec.9) and finally 1.2032 (23.6% Fibo of the 2017-2018 rally).