EUR/USD clings to 1.2200 as Brexit optimism downs the USD

• EUR/USD remains on the bid as the US dollar suffers.
• Risk-on mood prevails on an imminent Brexit deal.
• Brexit updates and pre-X-mas thin trading – key.

EUR/USD eases from highs, clinging onto the 1.2200 level ahead of the European open. The bulls ride the Brexit optimism wave, with a potential breakthrough likely to be announced at 1100 GMT.

The UK and the European Union are on the cusp of reaching a long-awaited Brexit trade deal. The optimism is the main driver behind the US dollar’s decline so far this Thursday, helping the upside in the main currency pair.

Meanwhile, the sentiment also remains underpinned by the expectations of a US stimulus deal and coronavirus vaccine availability, which adds to the reduced demand for the greenback as a safe-haven.

The upbeat US Durable Goods and Jobless Claims data fail to impress the dollar bulls, as the broader market sentiment continues to lead. The spot will continue to get influenced by the Brexit updates and risk flows amid holiday-thinned Christmas eve. Most major European markets are closed this Thursday, as traders move away to celebrate the pre-X-mas festivities.

EUR/USD technical levels