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EUR/USD on a steady rise towards 1.1800, US data eyed

  • Headed to 100-DMA at 1.1808.
  • Eyes on US-German yield spread.
  • ECB/ Fed meeting in focus.

The EUR/USD pair extends its gradual pace of increase in the early European trading, now looking to regain 1.18 handle amid persisting weakness in the US dollar against its major peers.  

The offered tone around the US dollar picked-up pace, as the European traders hit their desks and reacted negatively to the weak wage growth numbers seen in Friday’s US jobs report. Hence, the greenback accelerated declines across the board and hit fresh two-day lows of 93.76, extending its retreat from pre-NFP two-week tops of 94.08 levels.

However, further gains appear limited as the US-Germany yield spread remains supportive of the US dollar ahead of the Fed and ECB monetary policy decisions due later this week. Therefore, markets could adopt ‘Sell the rallies” strategy, while a drop on a hawkish Fed and dovish ECB outcome could be seen as a good buying opportunity in EUR/USD.

Ahead of the central banks’ meetings, the German ZEW economic surveys and US inflation numbers will be looked forward to for fresh trading impetus.

EUR/USD Preferred Strategy

Jim Langlands at FX Charts notes: “The short-term momentum indicators look mixed at the start of the week and I remain fairly neutral although the daily charts do appear to be turning a little lower and maybe hinting of further dollar strength ahead. With no major data, look to trade 1.1740/1.1800 today.”

Key Technical Levels

Resistance

 

Support

 

1.1877

4 Dec high

1.1755

Daily Kijun

1.1847

6 Dec high

1.1730

Friday low

1.1814

7 Dec high

1.1707

(61.8% of 1.1553/1.1943)

1.1800

100 DMA

1.1685

Rising trend support

1.1775

Friday high/55 DMA

1.1650

(76.4% of 1.1553/1.1943)

 

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