EUR/USD Forecast: Waiting for macro updates

16 Dec 2020, 05:45 · Views 51

EUR/USD Current Price: 1.2152

A scarce macroeconomic calendar ahead of first-tier figures kept EUR/USD ranging.
US Republican Senator Mitch McConnell acknowledged Joe Biden as the elected President.
EUR/USD continues to consolidate yearly gains above the 1.2100 threshold.

Trading was choppy across the FX board this Tuesday, with EUR/USD seesawing within familiar levels. The pair fell to 1.2120 as the dollar benefited from a sour market’s moo, but finished the day little changed around 1.2150. A scarce macroeconomic calendar and fundamental jitters were behind the absence of definitions. Brexit talks continue, which seems good, although no progress on negotiations has been reported. On a positive note, Republican Senator Mitch McConnell acknowledged Joe Biden as the elected President after the Electoral College confirmed his victory.

In the US, Industrial Production increased 0.4% in November, while Capacity Utilization was up to 73.3%, both beating the market’s expectations. Manufacturing output was up for the seventh consecutive month. Also, House Speaker Nancy Pelosi invited fellow leaders to a meeting to discuss government funding and coronavirus relief. Without fresh funding, the US government will be shutting down this weekend.

On Wednesday, Markit will publish the preliminary estimates of its December PMIs for the EU and the US. Manufacturing activity in the EU is expected to have contracted but also to have held within expansion territory. Services output, however, is expected to fell further into contraction levels. The US will publish November Retail Sales, foreseen at -0.3% MoM, while in the American afternoon, the Federal Reserve will release its latest monetary policy decision and publish fresh economic projections.

EUR/USD short-term technical outlook

The EUR/USD pair seems poised to extend its advance in the near-term. The 4-hour chart shows that the price has briefly pierced a mildly bullish 20 SMA but quickly recovered above it. The longer moving averages continue to advance below the shorter one, reflecting continued buying interest. Technical indicators hold within positive levels, although lacking directional strength. The pair could accelerate its advance once beyond 1.2177, so far the year’s high.

Support levels: 1.2120 1.2075 1.2030

Resistance levels: 1.2180 1.2230 1.2280

View Live Chart for the EUR/USD

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