- EUR/USD climbs to new highs near the 1.20 mark.
- Dollar weakness supports the upside in the pair.
- German flash inflation figures next of note in the calendar.
The upbeat momentum in the single currency lifts EUR/USD to the area of fresh multi-week highs above 1.1980.
EUR/USD now looks to 1.2000
EUR/USD advances for the fifth consecutive session on Monday and trades at shouting distance from the psychological mark at 1.20 the figure.
EUR/USD extends the uptrend always in response to the persistent offered bias surrounding the greenback. Hopes of a strong recovery in the global economy, solid optimism on an effective vaccine and renewed prospects of extra US stimulus under a Biden’s presidency.
Data wise in the euro area, Spanish inflation figures showed the CPI is expected to rise 0.2% MoM in November and contract 0.8% over the last twelve months. In Italy, consumer prices are seen contracting 0.1% inter-month and 0.2% from a year earlier. Later in the session, ECB’s President C.Lagarde is due to speak seconded by German advanced CPI and the speech by Board member P.Hakkarainen.
What to look for around EUR
EUR/USD’s rally moves closer to the 1.20 yardstick and opens the door to a probable test of the so far 2020 peaks near 1.2020, always against the backdrop of a favourable atmosphere for 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 around the EU Recovery Fund and increasing chances of further ECB easing to be announced as soon as at the December meeting.
EUR/USD levels to watch
At the moment, the pair is gaining 0.18% at 1.1984 and a break above 1.2000 (psychological level) would target 1.2011 (2020 high Sep.1) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the flip side, immediate contention emerges at 1.1800 (low Nov.23) followed by 1.1745 (weekly low Nov.11) and finally 1.1709 (Fibo level of the 2017-2018 rally).
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