EUR/USD Forecast: Needs To Advance Beyond 1.1120 To Attract More Buyers

EUR/USD Current Price: 1.1096

• German ZEW survey surprised to the upside, with business sentiment improving sharply in December.
• Concerns about the global trade situation keep markets in risk-off mode, dollar down.
• EUR/USD needs to advance beyond 1.1120 to attract more buyers.

The EUR/USD pair has advanced within familiar levels this Tuesday, adding some 30 pips on a daily basis amid persistent dollar’s weakness. The pair flirted with 1.1100 mid-US afternoon, following trade war-related headlines. Earlier in the day, headlines suggested that the US would delay the next round of tariffs scheduled for Dec. 15, although later, US Secretary Kudlow, said that US President Trump is yet to decide on the issue.

The shared currency got a modest boost from the German ZEW survey, which beat expectations,  as the country’s Economic Sentiment jumped to 10.7 in December, while for the whole Union was up to 11.2, both largely surpassing the market’s expectations. US data, on the other hand, disappointed, as Q3 Non-farm Productivity declined by 0.2%, while Unit Labor Cost for the same period rose by 2.5%, both well below the market’s expectations.

This Wednesday, the focus will be on the US, as the country will release November inflation data, while later in the day, the US Federal Reserve will announce its latest decision on monetary policy. The central bank is expected to keep rates on hold after three consecutive rate cuts, with the market rather focus in any guidance for 2020.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is trading near the monthly high at 1.1115, although the bullish potential is limited given that the pair would need to advance beyond such level to attract more buyers. In the 4-hour chart, the price has settled above all of its moving averages, which anyway lack directional strength. Technical indicators have advanced, with the Momentum surpassing its mid-line for the first time this week, as the RSI extends its slope within positive levels. The downside is limited by buyers aligned around 1.1065, a relevant Fibonacci support.

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