FX.co ★ GokBoruHunter | EUR/USD

EUR/USD Daily Outlook Update The EUR/USD currency pair registers positive momentum for the second straight day on Thursday as it trades near 1.1242 during the European session, close to a near one-week high set yesterday. The US Dollar (USD) sinks to a new low since late September amid the Democrats' sweep in the US mid-term elections, which has sparked fears of fiscal gridlock, restricting government expenditure and slowing economic growth. Moreover, prospects of an end to the Iran war have dampened crude oil prices and curbed inflation concerns, leading to a fall in US bond yields. This comes despite expectations of a US Federal Reserve (Fed) interest rate hike and remains a headwind for the greenback, supporting EUR/USD. Meanwhile, Wednesday's data showed Eurozone inflation rose to 4.0% in October, hitting a three-year high. The move has raised the chances of a 25 basis point interest rate hike in the Eurozone by the European Central Bank in December and supports the euro. However, concerns about growing indebtedness and political stalemate in France could dampen prospects for bold moves by euro traders and limit potential gains in the currency pair. Technically, EUR/USD is trading above the 200-period SMA on a 4-hour chart, and bulls await a breakthrough above 1.1270, the upper end of the one-month-old range. At the same time, momentum oscillators maintain a constructive short-term outlook, with the RSI in the bullish zone just below overbought levels and the MACD line remaining positive. However, a failure to hold above this bar near the close would signal weakening bullish strength, pushing EUR/USD below 1.1200. A breakdown below this level may put pressure on the lower end of the range, around 1.1120-1.1110. Once it breaks convincingly, it could mark a new trigger point for bears to prolong the downtrend they've been experiencing over the last two months.