EUR/USD extends bullish momentum towards 10-DMA

The bulls continue to cheer renewed optimism sparked around the Euroland, in wake of the Italian government’s approval of the decree and Deutsche Bank finally reaching a settlement in its mortgages case.

EUR/USD inching slowly towards 1.0500

Currently, EUR/USD trades +0.12% higher near fresh session highs of 1.0452, extending its gradual advance next resistance located at 1.0457. The recovery momentum behind the EUR/USD pair appears to have gained further traction in early Europe, with the European traders hitting their desk and reacting positively to the reports of the Italian government having approved the decree to support fragile Italian banks and Monte Dei Paschi’s plans to seek the state aid.

Moreover, the euro also received fresh boost after the German largest lender Deutsch Bank announced its agreement to settle its dispute with the US Department of Justice (DOJ) over the mortgages case. While renewed USD selling against its main competitors also collaborate to the extended recovery in the major.

Amid pre-Christmas break thin markets, the immediate focus now shifts towards the Gfk German climate release, while US new home sales and revised consumer sentiment data are due on the cards later today.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0457 (10-DMA). A break beyond the last, doors will open for a test of 1.0485 (daily R1) and from there to 1.0500 (round figure). On the flip side, the immediate support is placed at 1.0419 (5-DMA) below which 1.0383 (Dec 21 low) and 1.0352 (yearly/ 14-yr lows) could be tested.