EUR / USD bulls remain in control as the pair rallies to fresh daily highs above 1.2250

• Mild USD conditions exacerbated by risk in market sentiment have pushed EUR / USD to new multi-year highs above 1.2250.
• Brexit hopes could also be helping the cross; The Prime Minister of the United Kingdom and the President of the EU Commission will speak by phone at 19:00 GMT.

He EUR/USD it has continued to rise throughout the day on Thursday and has crossed above 1.2250 in recent trading. Currently, the pair is trading with gains of more than 0.5% or almost 70 pips on the day.

EUR / USD rallies as a result of mild USD conditions

It has been an ugly day for the US dollar. Multiple factors have been working against him, including; 1) Fed Chairman Powell’s dovish tone at the post-meeting press conference, 2) a continued pumping of hopes that deals can be reached on increased US Covid-19 aid. and a Brexit deal and 3) a survey of the US manufacturing and labor market have triggered higher bets for more stimulus from the Fed in January and 4) a drop in real US interest rates driven by a rise in inflation expectations. As a result, the dollar index (DXY) has plunged below the 90.00 level for the first time since April 2018.

While the EUR has not been the number one beneficiary of this (GBP, AUD and NZD rank above the euro on the G10 FX performance chart), it is still enjoying a decent ride on the wave of USD weakness. . Those three currencies are being driven higher by domestic fundamental impulses; The AUD has benefited from strong labor market data and a strong fiscal update from the government (more here), the NZD has benefited from strong third-quarter GDP data and comments from the country’s Finance Minister on valuation of the NZD (more here) and the GBP is benefiting from the hopes of Brexit.

Arguably, although these Brexit hopes are weighing on the EUR / GBP cross (which is down around 0.2% or 20 pips), they are helping the EUR / USD rally. In fact, a Brexit deal is not only good for the UK economy, but also for the euro zone. In terms of the latter;

British Prime Minister Boris Johnson and EU Commission President von der Leyen will make a call at 19:00 GMT. There is no indication that negotiators have crossed the finish line of a deal at the moment, so market commentators are speculating that the decision will be another “stock control.”

But the reports on the state of the negotiations in general have been good; Germany reportedly sees the UK “moving” in the talks, and despite reiterations from the British Prime Minister and other UK officials that a no-deal remains the most likely outcome, EU sources said Thursday. that a trade deal with the UK is “pretty close”. and it could be ready by the end of the weekend. Barnier, the EU’s Brexit negotiator, was also optimistic. The UK has even started drafting legislation that would allow for swift passage of a Brexit deal before the end of the year, according to reports.

Technical levels