EUR/USD consolidates near 1.1850, upside bias intact

• Spot rises for the third day in-a-row. 
• Headed toward highest close in a month. 
• Key data ahead: German IFO and US PMI. 

The EUR/USD pair rose on Thursday, on a low volume, quiet US session. It reached a 1-week high at 1.1855 after the release of the European Central Bank minutes from its latest meeting. Then pulled back and during the last hours, it has been moving in a range 1.1840/55. 

PMI, ECB minutes and holiday 

During the European session, the euro gained momentum after the release of the European preliminary PMIs for November. The manufacturing index climbed to 60.0, 7-year highs. Then came the ECB minutes that added little new information. “Minutes of the last ECB meeting show broad support for taper decision but controversy on whether or not QE extension should be open-ended”, said analysts from ING. 

The economic numbers, the minutes and a weak US Dollar kept EUR/USD near last week highs and clearly above 1.1800. The greenback remained under pressure following yesterday’s FOMC minutes. The DXY hit today a fresh 1-month low below 93.00. 

Friday is expected to be another low volume trading day. Wall Street will have a shortened session. Regarding economic data, Germany will release its November IFO survey, while Markit will release the November preliminary US PMIs.

Technical outlook 

EUR/USD continues to move with a clear upside bias, now near an important technical resistance area below 1.1880. “From a technical point of view, and considering the fact that the pair has held above the support area around 1.1820/30, the risk remains towards the upside according to short-term technical readings, as in the 4 hours chart, the price is well above a now bullish 20 SMA, as the Momentum maintains its bullish slope near overbought readings, and the RSI consolidates around 68”, said Valeria Bednarik, Chief Analyst at FXStreet. 

She added that EUR/USD is holding above the key 1.1790 level, the 23.6% retracement of the latest bullish run. “The pair has a strong resistance at 1.1890, where selling interest capped the advance for most of October. Beyond it, and approach to the 1.2000 threshold becomes more than likely.”