The European currency rose against the US dollar at the beginning of the day amid a low after the New Year trading volume. It is not yet known whether the demand for the euro will continue in the current format, but buyers will have to make a lot of effort to do this.
Good data on the US labor market, which came out at the end of last week, helped keep the dollar from another sale.
According to a report by the US Department of Labor, the number of Americans who first applied for unemployment benefits declined. Thus, the number of initial claims for unemployment benefits for the week from December 16 to December 22 decreased by 1,000 and amounted to 216,000. Economists had expected that the number of new applications would be 217,000.
Today is expected to yield a number of statistics on production activity, which may affect the rate of the European currency if the data turn out to be worse than economists' forecasts. It is expected that the business activity index in the manufacturing sector of Germany in December will remain unchanged at the level of 51.5 points, while the similar indicator for the euro area should also remain at the level of 51.4 points. If the data comes out worse than expected, this will trigger the closure of a number of long positions in risky assets.
As for the technical picture of the EUR / USD pair, in order to preserve the bullish nature of the market, buyers need real breakdown and consolidation above the high of December last year, which is located in the area of 1.1490. If the breakdown of this level takes place, the demand for risky assets will increase, which will open a direct path to the new resistance levels of 1.1540 and 1.1605.
If the growth of the euro, which is now observed, will not be supported by good data and new purchases, then most likely another unsuccessful fixing above the resistance of 1.1490 will lead to a new wave of sales of EUR / USD, with a return to the minimum areas of 1.1410 and 1.1330.
The British pound rose late last year after reports that Prime Minister Theresa May scheduled a cabinet meeting for January 2. This was done in order to be able to discuss plans for the case of leaving the EU without an agreement. Let me remind you that the majority of specialists and experts are confident of the failure of the Brexit agreement, which is unlikely to pass through parliament. However, it is inappropriate to talk about the further growth of the pound, without any specifics in the negotiations.
In case of return of the trading instrument under the support level of 1.2735, most likely traders will hasten to take profits in long positions, which will lead to even greater pressure on GBP / USD and decrease in the pair to the middle border of the side channel of 1.2670, where the pound has been in the last few weeks.
The material has been provided by InstaForex Company - www.instaforex.com