EUR/USD fades a freak spike, back below 1.0550
With thin trading prevalent in the markets ahead of the New Year holiday-break, the EUR/USD pair witnessed wild swings in early Asia, before reversing more-than 100-pips as we progress towards the European open.
The main currency pair witnessed a momentary freak spike and hit 1.0650 figure, rallying more-than a big figure in a matter of minutes, with markets citing thin liquidity as the key catalyst behind this volatile upmove.
Thereafter, markets began to readjust and brought the spot back on the 1.05 handle, with the bulls now consolidating the heavy gains amid a minor-recovery attempt staged by the greenback against its main competitors.
Heading into a New Year, the main focus will remain on the Trump’s inauguration on Jan 20 as he takes the office as the 45th US President, while the Italian banking crisis and monetary policy divergence between Fed and ECB will also remain the key underlying theme next year.
EUR/USD Technical Levels
In terms of technicals, the pair finds the immediate resistance 1.0600 (zero figure). A break beyond the last, doors will open for a test of 1.0653 (2-week highs) and from there to 1.0673 (mid-Dec high). On the flip side, the immediate support is placed at 1.0500 (round number) below which 1.0471 (5-DMA) and 1.0451 (10-DMA) could be tested.