EUR/USD jump to over 3-month tops ahead of German CPI

   •  Up-move supported by persistent USD weakness.
   •  Spanish CPI print falls short of expectations.
   •  German CPI eyed for fresh bullish impetus. 

The EUR/USD pair traded with a bullish bias for the third consecutive session and peeped above 1.1960 level to hit over 3-month highs. 

The pair built on last week's strong up-move and was being further supported by broad-based greenback selling pressure. In fact, the key US Dollar Index struggled near multi-week lows and had been one of the key factors driving the pair higher. 

Meanwhile, the market seems to have largely ignored today's weaker Spanish flash CPI print, coming in at 0.1% for December as against 0.3% expected, with the prevailing bearish USD sentiment acting as an exclusive driver of the pair's momentum. 

Traders now look forward to the release of German flash CPI print, which is expected to rise 0.5% m-o-m and decelerate to 1.5% over the year in December. Moreover, the HICP is also expected to decelerate to 1.4% on a y-o-y basis in December, but with no relevant data from the US is unlikely to hinder the ongoing bullish run-up.

Technical levels to watch

As the AceTrader team writes: "Yesterday's resumption of recent upmove to a 1-month high at 1.1959 (New York) due to broad-based USD's weakness suggests re-test of November's 2-month peak at 1.1961 would be forthcoming soon, break would encourage for subsequent headway towards 1.2000, however, near term loss of upward momentum should prevent strong gain and res at 1.2034 should cap upside."

"Only below 1.1910 (previous res, now sup) confirms temporary top is in place and risks stronger retracement to 1.1879/81 but reckon sup at 1.1847 should hold from here and yield another leg of upmove next week."