Looking at the chart on the weekly time frame, we can see that the euro is currently at a very important crossroads. It has made big gains since the beginning of the year against the dollar. The EUR/USD pair is now at a Fibonacci level of 50.0%, and we can now expect consolidation at that level.
In 2017, we also had a strong bullish momentum to 1.25000, which lasted until January 2018 until the meeting in Davos, where after that the dollar strengthened sharply. By the end of the year, we should not have any major movements on the chart because the market is slowing down due to the New Year holidays.
On the daily time frame, we see consolidation between 1.21000-1.23000. For now, the EUR/USD pair has support at 1.21500 daily, and we can expect a move up to 1.22300. The pair still supports all three moving averages MA50, MA100, and MA200; the chances are higher that the EUR/USD pair will continue to grow higher based on previous candlesticks, as the lower side support is stronger at 1.21000.
On the four-point time frame, we best see the EUR/USD pair moving in a growing parallel channel with a certain pullback to the bottom trend line with the support of moving averages MA50 and MA100 around the zone at 1.21500. At this time frame, we can expect the EUR/USD pair to continue to grow towards higher levels above 1.22000.
From today’s economic news, we can single out: German import prices that continued to fall in November, driven by energy prices. Import prices fell by 3.8 percent year on year, after falling by 3.9 percent in October. Germany reports 24,740 new coronavirus cases in the latest update today; with the number of deaths on the high side, all thoughts of relaxing restrictions shortly will surely be left aside for now.
After disappointing data on house prices in the USA overnight, the USA is publishing many important data tonight.
Initial claims for the unemployed could reach over 900,000 in a week, and durable goods would be withdrawn at 0.60%. Personal spending is expected to fall by 0.40% in November, slightly better than October. All in all, the picture will be Covid-19, which affects domestic demand and jobs, although production is still strong, as is the case in Europe.
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