The bloc currency continues to trade in a consolidation pattern around 1.3450, propped up by relentless buying interest in eurozone assets, thank to the rosy euro area prospects highlighted in the last ECB gathering.
… FOMC? Not this time
The improvement in German consumer confidence passed by, ignored by the market participants and falling into the 'over-expected' bracket following last week's ZEW and IFO numbers. In addition, an irrelevant docket has not helped EUR/USD price action either, leaving the potential catalyst for later in the week, as the preliminary U.S. Q4 GDP, the FOMC monetary policy gathering, German CPI, before Non-farm Payrolls on Friday all line up as potential market movers.
Regarding the FOMC meeting, and according to the broader market consensus, there won't be room for any surprises-- not even at the subsequent Bernanke press conference. Therefore, the current path of monetary policy should remain intact alongside the neutral-to-dovish tone seen in the December meeting.
Subsequently, in the very near-term, the euro is well posed for an extension of the post-ECB rally towards the initial target at 1.3487 (high 2012), followed by the 50% Fibonacci retracement of the 2011-2012 descent currently in the boundaries of 1.3500 and then the area around 1.3560, home of the 200-week moving average and the 55-month moving average.
Although not her preferred scenario, expert Karen Jones at Commerzbank points out that "Should a close above 1.3562 be seen (not favoured) we have very little resistance of note until 1.3833, the 61.8% retracement of the move down from the 2011-2012 move".
The Bullish Percentage Index, developed by the research team at FXstreet.com, is accompanying the euro momentum despite the ongoing correction from recent tops in the 1.3480 region, signaling that 89.47% of euro-based pairs are still on bullish mode, according to point and figure patterns.