Euro’s Three Boosters May Propel It Above Ascending Triangle Ahead Of The Fed

The technicals have said their word – a surge is coming, but do fundamentals back a breakout? Most of them do. Here are three factors already fueling EUR/USD:

Three EUR/USD boosters

1) US stimulus hopes: Senate Majority Mitch McConnell jumped into talks on Capitol Hill and his urge to seal a deal for more relief has brought fresh impetus to the talks. His move came after he finally acknowledged President-elect Joe Biden’s victory.

While there are differences with some Democrats, optimism about a lame-duck accord – potentially preceding another one under the new administration – is boosting sentiment. Markets would like more generous stimulus but will take anything at this point. This weighs on the safe-haven dollar.

2) Vaccine progress: The European Medicine Agency has brought forward its decision on the Pfizer/BioNTech vaccine to December 21 from the 29, and it could not come sooner. Germany has entered a strict lockdown on Wednesday and other countries are also struggling with a fresh resurgence of COVID-19.

The US and the UK are already administering the inoculation. America’s Food and Drugs Administration published upbeat analysts of Moderna’s vaccine, paving the way for giving it the greenlight. US cases, deaths, and hospitalizations continue rising – California order of 5,000 bodybags is especially grim.

3) Brexit deal coming? Rumors of an imminent accord in London proved wrong, but the intense talks in Brussels and silence from negotiators is a sign that the EU and the UK are making headway. The pound’s upswing is also dragging along the euro.

What’s next?

A busy day awaits investors. Markit’s preliminary Purchasing Managers’ Indexes are set to show a drop in sentiment amid the winter wave. The firm’s surveys in the US are also eyed.

Retail Sales figures for November are of higher interest – as consumption is some 70% of the US economy. A minor drop is on the cards after several upbeat months. Disappointing statistics could be enough to send EUR/USD over the top, without waiting for the day’s main event.

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