EUR/USD to stretch higher if buyers continue to defend 1.1320

EUR/USD capitalized on broad-based dollar weakness and climbed toward the upper limit of its December trading range around mid-1.1300s late Wednesday before going into a consolidation phase on Thursday. Additional recovery gains are likely if 1.1320 support holds, FXStreet’s Eren Sengezer reports.

The Personal Consumption Expenditures (PCE) Price Index data will be featured in the US economic docket

“Investors expect the Core PCE inflation to rise to 4.5% on a yearly basis in November from 4.1% in October. A stronger-than-expected print could revive inflation fears and cause the risk rally to lose steam. On the flip side, a soft inflation reading is likely to limit a potential recovery in the DXY.”

“1.1360 (post-ECB high) aligns as the first technical resistance before 1.1380 (Nov. 30 high) and 1.1400 (psychological level).”

“Additional corrective losses toward 1.1300 (psychological level, 100-period SMA) and 1.1280 (50-period SMA) could be witnessed if a four-hour candle closes below 1.1320 (200-period SMA).”