EURUSD Taps 4-Month Highs in Ahead of the New Year

EURUSD traded steadily higher in yesterday’s trading amid mixed economic reports from the US. The currency pair opened at 1.1172 and peaked at 1.1220 for the day. By the end of the New York session, EURUSD had settled at 1.1197.

Mixed Economic Reports from the US

Yesterday, it was reported that the Chicago PMI for December was at 48.9. While this reading is below the 50.0 baseline figure which indicates an expansion in economic activity, it is an improvement from November’s reading at 46.3. The report also topped forecasts which was for a 48.2 reading. On the other hand, the New Home Sales report for November fell short of expectations when it came in at 1.2% versus the 1.5% consensus. On the brighter side of things, October’s reading saw an upward revision to -1.3% from being initially reported at -1.75%.

US Consumer Confidence Due Today

For today, the Conference Board will release its consumer confidence report for December at 3:00 pm GMT. It is expected to show an improvement from November’s 125.5 reading with the forecast at 128.0.

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EURUSD Outlook

On the 4-hour time frame, we can see that it’s been an incredibly bullish holiday season for EURUSD. Now, the currency pair is consolidating just above resistance at around 1.1180. A strong bullish close above yesterday’s highs at 1.1220 could mean that it could be headed to its June 2019 highs at 1.1406.

On the other hand, the consolidation may also mean that the euro’s rally is running out of steam. A bearish close below yesterday’s lows at 1.1181 could mean that EURUSD could fall to support around 1.1125. This price coincides with the 61.8% Fib level when you draw the Fibonacci retracement tool from the low of December 24 to yesterday’s high. It also seems to coincide with the 100 SMA.

If support at this level holds, we could see EURUSD extend its rally. On the other hand, if it does not, the currency pair could drop to its November lows at 1.0990.

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