With volatility low and as risk appetite picked up, EURUSD was able to finish higher on Boxing Day. The currency pair opened at 1.1090 and bottomed at 1.1081. During the New York session it tapped an intraday high of 1.1108 before closing the day at 1.1096.
Risk Appetite Dictates Market Sentiment
Yesterday, China’s Ministry of Commerce announced that its phase one deal with the US has been moving forward. According to its spokesman Gao Feng, the negotiating teams have been closely working with each other to proofread, translate, and review the legal terms of the deal. It has also been said that China is organizing a signing ceremony for when all the review is done.
Economic Data for this Week
European banks were closed for Boxing Day yesterday. However, the US Department of Labor released its unemployment claims report for last week. It came in as expected at 222,000. Meanwhile, for today, the ECB Economic Bulletin report is due to be released at 9:00 am GMT. If the report show that European policymakers are more optimistic about the economy, we could see the euro further its gains in today’s trading.
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EURUSD Outlook
On the hourly time frame, we can see that EURUSD has made another bullish run up the charts in today’s Asian session. Now, drawing the Fibonacci retracement tool from this morning’s lows to its intra-session highs, we can see that EURUSD can have some room to trade lower and still maintain its short-term uptrend. Connecting the currency pair’s lows from December 24 and December 26, we can see that the trend line may offer support around 1.1103. This price also seems to coincide nicely with the 61.8% Fib level.
However, if risk appetite is sustained, we may not even see a pullback on EURUSD anymore. The currency pair could be headed to its December 19 highs at 1.1143.
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