EUR/USD rose on Wednesday with the help of unexpectedly strong euro zone PMIs nL8N2IW23C in a rally that got a second wind following surprisingly weak U.S. retail sales nL1N2IV2EH, which should further the euro's bid to regain 2018's 1.2556 peak.
A dovish message from the Fed after Wednesday's meeting concludes should support EUR/USD's campaign to reverse its downtrend from 2011, as should the growing prospect of a U.S. relief bill nL1N2IW12Q
Since the retail sales disappointment adds to the sense of urgency surrounding fiscal stimulus, it should favor reflation trades funded with cheap dollars, along with expectations that widening U.S. and European vaccine distribution will hasten the pandemic's end.
EUR/USD appears on track to reach a 161.8% Fibo objective at 1.2435 off November's base nL1N2IW0ZE.
The broader target is a full retracement of the drop from 2018's 1.2556 high to this year's 1.0636 EBS low.
That view is reinforced by this week's range being above the final 76.4% Fibo at 1.2103.
Though EUR/USD is becoming overbought on daily RSIs, a fresh expansion of tight Bolli bands suggests more room for gains.
For more click on FXBUZ