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EUR/USD Current Price: 1.0648
- Financial markets returned after the long weekend with optimism.
- US macroeconomic data failed to impress, giving the US Dollar a short-lived boost.
- EUR/USD quickly bounced from an intraday low of 1.0611, indicating that bulls are in control.
The EUR/USD pair started the day with a bullish gap, advancing up to 1.0669, a one-week high, ending the day not far below the latter. It filled the gap after Wall Street’s opening, as poor US data temporarily boosted the greenback. Nevertheless, optimism prevailed. Financial markets were in risk-on mode amid news coming from China at the beginning of the day. The country upwardly revised its Gross Domestic Product (GDP) estimate for 2021, up to 8.4% from 8.1%. Additionally, the government continues to ease covid-related restrictions, which will mitigate the negative impact limitations had on the economy. Finally, the China Immigration Administration announced it would resume issuing visas for mainland citizens travelling abroad.
The EU did not publish macroeconomic figures, but the US released the November Trade Balance, which posted a deficit of $83.3 billion, improving from the previous deficit of $98.8 billion. Wholesale Inventories for the same month were up 1%, worse than the 0.7% expected, while the October Housing Price Index remained pat. Finally, the December Dallas Fed Manufacturing Business Index contracted to -18.8 from -14.4 in the previous month.
On Wednesday, the macroeconomic calendar will remain scarce, as the US will only release minor figures, including November Pending Home Sales and the December Richmond Fed Manufacturing Index.
EUR/USD short-term technical outlook
The EUR/USD pair holds on to modest gains and its bullish stance, according to technical readings in the daily chart. The pair stands above all of its moving averages, with the 20 Simple Moving Average (SMA) still heading north above the longer ones and below the current level. The Momentum indicator advances modestly after bouncing from its midline, while the RSI consolidates around 65, showing no signs of upward exhaustion.
The 4-hour chart shows that the pair is neutral-to-bullish. Buyers are defending the downside at around a flat 20 SMA, currently at 1.0620. The 100 SMA is also directionless, although below the shorter one, while the 200 SMA advances far below the current level. Finally, technical indicators have lost their directional strength and hover within neutral levels.
Support levels: 1.0620 1.0580 1.0535
Resistance levels: 1.0695 1.0740 1.0785
View Live Chart for the EUR/USD
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