- DXY in doldrums
- 2017 highs of 1.2092 still in sight.
- Manufacturing PMIs to dominate.
The EUR/USD pair extends its upside consolidative mode into Asia, now looking to retest three-month tops of 1.2030 levels ahead of the Euro area final manufacturing PMI releases.
EUR/USD: Bullish bias intact
Stepping into the New Year, the EUR/USD pair keeps its recent bullish momentum intact, as the US dollar remains broadly undermined on weaker Treasury yields, in the wake of expectations of the monetary policy convergence. Markets believe that the Fed could under-deliver on its rate hike expectations while the ECB could turn hawkish amid improving Eurozone economic prospects.
Valeria Bednarik, Chief Analyst at wrote, “The EUR/USD pair is not far from its 2017 multi-year high of 1.2092, and from a technical point of view, seems poised to extend its gains, despite these levels are highly uncomfortable for the ECB that fears a stronger currency will delay the progress towards their inflation target.”
Focus now shifts back towards fundamentals, with the final manufacturing PMIs from across the Euro area economies to dominate today ahead of the US payrolls data.
EUR/USD Technical Levels
Bednarik added: “The 4 hours chart shows that technical indicators turned modestly lower but hold within the overbought territory, as the 20 SMA advanced almost vertically, currently at 1.1925, providing a strong intraday dynamic support in the case that profit-taking hit the pair this Tuesday. Support levels: 1.1960 1.1925 1.1890. Resistance levels: 1.2045 1.2090 1.2130.”