The EUR/USD pair recovered positive momentum and went up over 100 pips during the day in a rather faded holiday trading action on Thursday. The prevalent USD selling bias, further exacerbated by weak data turned out to be an exclusive driver of the pair’s strong positive traction. Thursday data showed the US consumer confidence dropped to its lowest level in more than three years and renewed fears about worsening global growth outlook.
Global growth concerns have caused a new wave of negative sentiment, which led to an increase in demand for US Treasury bonds and undermined demand for the dollar. Meanwhile, expectations of a slowdown in US economic growth next year further contributed to providing some strong downward pressure on the dollar.
The publication of German prelim CPI for December may affect the shared currency, which, along with some publications on the US economy of the second level – Chicago PMI and pending home sales data, may create some short-term opportunities on the last trading day of the week.
The Euro made a nice upward move and traded above the 1.1420 resistance area against the US Dollar. The EUR/USD pair even broke the 1.1450 resistance area and buyers remained in control.
The pair traded towards the 1.1470 resistance and it is currently placed well above the 50 hourly simple moving average. The pair traded as high as 1.1466 and it is currently consolidating gains. Initial support is near 1.1440 and the 23.6% Fib retracement level of the last wave from the 1.1364 low to 1.1466 high.
If there are more declines, the pair may perhaps test the 1.1420-20 support area. The main support is near 1.1400 and a bullish trend line on the hourly chart.
On the upside, the pair may soon break the 1.1470 and 1.1480 resistance levels in the near term.