EUR/USD stays indecisive above 1.1300 as risk-on battles Christmas Eve

EUR/USD picks up bids to consolidate intraday losses around 1.1330, down 0.05% during early Friday. The major currency pair snapped three-day advances the previous day but closed with minor losses.

On the four-hour chart, the Relative Strength Index (RSI) indicator is moving sideways around 60, suggesting that sellers show no interest in the pair for the time being. Additionally, the last four candles on the same chart closed above the 200-period SMA; confirming the bullish bias in the near term. 

Static resistance seems to have formed at 1.1340 ahead of 1.1360 (post-ECB high on December 16) and 1.1380 (November 30 high). 

On the downside, supports are located at 1.1310 (200-period SMA) and 1.1290 (50-period SMA).

Fundamental Overview

EUR/USD seems to have steadied around mid-1.1300s on Friday as the trading action turns subdued on Christmas Eve. The near-term bullish outlook remains intact for the pair but thin trading conditions are likely to limit the movements in the remainder of the day.

The data published by the US Burau of Economic Analysis revealed on Thursday that the annual Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred gauge of inflation, jumped to 4.7% in November from 4.2% in October. This print surpassed the market expectation of 4.2% and helped the dollar stay resilient against its rivals in the second half of the day.

The benchmark 10-year US Treasury bond yield edged higher toward 1.5% after the inflation report and according to the CME Group’s FedWatch Tool, markets are pricing a 53.8% probability of a 25 basis points Fed rate hike in March.

Bond and stock markets in the US will be closed on Friday and investors will keep an eye on technical levels when they return on Monday.