EUR/USD finds support at 1.1850 and consolidates recent gains
- EUR/USD holds in ranges despite US dollar weakness.
- US Dollar and euro among worst performers among G10 currencies on Wednesday.
The EUR/USD found support (again) at the 1.1850 area and rebounded to the 1.1870 area. It continues to trade in the range 1.1850-1.1890 holding onto recent gains. A week ago, it was trading below 1.1750. Positive risk sentiment and a weaker dollar offer support to the pair.
The DXY is falling on Wednesday, trading slightly above 92.20, at one-week lows. The greenback is facing pressure amid an improvement in market sentiment. The euro is also among the worst performers in the G10 space, probably affected by the decline in EUR/GBP.
EUR/USD, risk appetite and central banks
Economic data from the US and the Eurozone had no impact on the EUR/USD. The pair continues to hold a positive correlation with Wall Street’s indexes. In the very short-term, a firm break of the Dow Jones above the 30,000 area could send the euro firmly above 1.1900 or even 1.2000, if current market conditions prevail.
“The euro remains well supported, and a steady slow grind to the 1.2000 level by yearend still looks very plausible. The markets are also very well priced for monetary easing by the ECB on 10th December which has had little impact on EUR performance”, mentioned analysts at MUFG Bank. They don’t see the degree of ECB action as decisive for direction. “Our sense is the markets are priced for a basic extension of the current stance rather than anything more. The direction of EUR/USD from here is really more about Fed action the following week – on 16th December.”
Technical levels