Daily Market Recap - EURUSD

The Euro is trading flat against the US Dollar on Wednesday after initially climbing to a two-year high early in the session. The Euro caught some aggressive bids on the back of strong Eurozone macroeconomic figures and optimism in the Brexit negotiations.

The Euro has been well supported since May after the EU announced its recovery fund to tackle the impacts from the covid-19 pandemic. Todays strong economic activity data has boosted speculation that Europe will be faring better than the US in the near term.

Buying demand in the EURUSD subsided and flipped in favor of sellers late in the session after the US dollar took a positive turn. The Dollar index bounced off of a multi-year low near the 90 marks as traders reacted to the announcement of a status quo in bond buying at the end of the 2-day Federal Reserve meeting.

EURUSD bulls may have been expecting a more dovish tone from the Fed, particularly hoping for the central bank to increase pressure on the US government to ramp up its stimulus measures. For now, a deal is under works in Congress for an amount rumored to be around 750 billion.

From a technical perspective, the EURUSD is struggling to maintain positive traction near the 1.22 resistance level. The pair has been met with firm rejection on its multiple attempts to cross above in the past two weeks. The upside target remains a cross above the 1.22 zone for a test of the 1.23 level.

(Chart Source: Tradingview 16.12.2020)

On the flipside, immediate support for the EURUSD should be felt at the 0.236 Fibonacci retracement level around 1.20531. A break below would set the next target at the round, psychologically significant 1.20 level. The likely range in the coming sessions should fall between 1.20 and 1.23.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.