- EUR / USD reverses the initial decline and picks up 1.2160.
- The dollar fades the initial optimism and returns below 91.00.
- Investor attention shifts to the ECB event on Thursday.
After making ground at 3-day lows near 1.2080, the EUR/USD manages to regain traction and is now back around 1.2150.
EUR / USD is still targeting 1.2200
EUR / USD returns to the upper end of the recent range and leaves behind the initial selling bias, which saw the pair break through key support at 1.2100.
Indeed, initial pro-dollar sentiment is losing steam, giving way to resumption of demand for riskier assets despite pandemic concerns, Brexit jitters, and renewed U.S.-China effervescence. .
Looking at the euro calendar, German industrial production surprised to the upside and expanded 3.2% month-on-month in October. Along the same lines, the Sentix index, which tracks investor confidence, stood at -2.7 for the month of December (from -10).
On the other hand, the only data to be published later on Monday will be the Consumer Credit Change for October.
What to look for around EUR
The upward momentum of the EUR / USD decreased near the 1.22 barrier in past sessions, always in the favorable context in the space associated with risk. In the very short term, EUR / USD appears supported by prospects for a strong recovery in the region coupled with the increasing likelihood of additional stimulus in the US The risks of this positive sentiment stem from potential political turmoil around the EU Recovery Fund and the growing chances of further easing measures from the ECB being announced as early as the December meeting.
Technical levels
At the moment, the pair is gaining 0.30% at 1.2157 and a breakout of 1.2177 (December 4, 2020 high) would target 1.2413 (April 17, 2018 monthly high) en route to 1.2476 (April 27, monthly high). March 2018). On the downside, the next support emerges at 1.1920 (November 9 high) followed by 1.1800 (November 23 low) and finally 1.1745 (November 11 weekly low).
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