EUR/USD spikes to fresh 2-month tops and retreats
• Renewed USD selling bias provides a fresh boost.
• Gains near 400-pips from early Nov. swing lows.
• Traders might resort to profit-taking ahead of this week’s key data.
After an initial dip to the 1.1910 region, the EUR/USD pair regained traction and refreshed 2-month tops in the past hour.
The incoming upbeat economic data coming out of the Euro-zone helped offset concerns over the latest German political uncertainty and remained supportive of the pair's strong up-move.
Adding to this, concerns over stubbornly low inflationary pressure undermined prospects for aggressive Fed rate hike moves post-December and kept the US Dollar bulls on the back-foot, eventually providing an additional boost to the pair.
The up-move, however, now seems to be losing some steam as investors looked to take some profits off the table, especially after the recent upsurge of 400-pips Nov. 7 swing lows near mid-1.1500s.
In absence of any market moving economic releases from the Euro-zone, the USD price dynamics would remain an exclusive driver of the pair's movement ahead of October new home sales data from the US. Later in the day, Fedspeaks might also provide some short-term trading opportunities.
Technical levels to watch
The key 1.20 psychological mark is likely to act as an immediate hurdle, above which the pair is likely to aim towards testing yearly tops resistance near the 1.2090 area, with some intermediate hurdle near the 1.2030-35 region.
On the flip side, any corrective slide now might continue to find immediate support near the 1.1900 handle, which if broken could extend the corrective slide towards the 1.1860 region en-route the 1.1800 handle.