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EUR/USD gained some strong positive traction on Monday amid sustained USD selling bias but relatively thin trading conditions warrant some caution before placing aggressive bullish bets, FXStreet’s Haresh Menghani reports.
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“Concerns about the discovery of a new faster-spreading variant of the coronavirus might temper enthusiasm. This, along with a goodish pickup in the US Treasury bond yields, might extend some support to the greenback and keep a lid on any runaway rally for the major, at least for now.”
“Trading volumes are expected to remain light in another holiday-shortened week. This, in turn, warrants some caution for aggressive bullish traders and before positioning for any further near-term appreciating move for the pair.”
“A move back towards retesting the 1.2270-75 region, over two-and-half-year tops touched on December 17, looks a distinct possibility. Some follow-through buying beyond the 1.2300 round-figure mark has the potential to push the pair further towards the 1.2340 resistance zone.”
“Any meaningful pullback towards the 1.2200 mark might still be seen as a buying opportunity and remain limited near the triangle support, around the 1.2185 region.”