- EUR/USD looks to reverse two sessions with losses.
- German ZEW survey, EMU’s flash Q3 GDP next of relevance.
- Focus of attention shifts to the ECB event later in the week.
Following two consecutive daily pullbacks, EUR/USD regains the composure and advances to the 1.2130 area on Tuesday.
EUR/USD now looks to ZEW, ECB
EUR/USD reverses the recent leg lower and manages well to keep business above 1.2100 the figure so far on turnaround Tuesday.
The pair reclaims ground lost pari passu with the softer mood surrounding the buck and despite it still navigates in the overbought territory. Persistent pandemic concerns, Brexit uncertainty and renewed US-China effervescence lent some support to the dollar in past sessions and motivated the knee-jerk in spot from fresh 32-month tops near 1.2180 (December 4).
Later in the session, the Economic Sentiment in both Germany and the broader Euroland are due seconded by another estimate of Q3 GDP figures in the bloc. Across the Atlantic, the NIFB Index will be the sole release ahead of the API’s weekly report on US crude oil inventories.
What to look for around EUR
The upside momentum in EUR/USD faltered in the proximity of the 1.22 barrier last week in spite of the favourable atmosphere in the risk complex. In the very near-term, EUR/USD appears supported by prospects of a strong recovery in the region along with the increasing likelihood of extra stimulus in the US. Risks to this positive view emerge from the potential political effervescence surrrounding the EU Recovery Fund and increasing chances of further ECB easing to be announced as soon as at the December meeting (Thursday).
EUR/USD levels to watch
At the moment, the pair is gaining 0.16% at 1.2125 and a breakout of 1.2177 (2020 high Dec.4) would target 1.2413 (monthly high Apr.17 2018) en route to 1.2476 (monthly high Mar.27 2018). On the other hand, the next support emerges at 1.1920 (high Nov.9) seconded by 1.1800 (low Nov.23) and finally 1.1745 (weekly low Nov.11).