EUR/USD: A phase of bullish consolidation ahead of German CPI

• DXY on the defensive in Asia.
• Bullish bias intact.
• Eurozone money supply and German CPI data eyed.

Having hit monthly tops at 1.1959 in the US last session, the EUR/USD pair corrected a part of yesterday’s rally in the overnight trades. However, fresh demand resurged in the Asian session, keeping the spot better bid near the midpoint of 1.19 handle.

EUR/USD supported near 1.1940 levels.

The spot is seen tracking the USD price-action closely amid a lack of fresh fundamentals, while pre-New Year thin trading helps underpin the sentiment around the EUR. The USD bears remain in command heading towards the yearly close, which is seen as the main driver fuelling the EUR/USD rally over the last week.

Valeria Bednarik, Chief Analyst at FXStreet notes, “Dollar's persistent weakness accelerated after the release of US data, which was mostly softer-than-expected. Friday will bring the release of German preliminary December inflation, and EU November money data, with no relevant news scheduled in the US.

EUR/USD Technical Levels

Bednarik adds: “From a technical point of view, the pair retains the bullish strength seen on previous updates, at least short-term, given that in the 4 hours chart, the Momentum indicator has finally accelerated north, maintaining its upward slope, while the RSI indicator also aims higher, although with lesser strength, currently at 76. In the same chart, the 20 SMA heads sharply higher well below the current level now around 1.1890, also signalling the absence of selling interest around the pair. Support levels: 1.1920 1.1890 1.1855. Resistance levels: 1.1960 1.2000 1.2045.”