EUR/USD struggles to extend four-day uptrend, grinds higher near weekly high.

Sluggish markets, cautious mood before the key US data test buyers.Holiday mood, Omicron fears act as immediate challenges, Fed v/s ECB battle stays on the top.EUR/USD remains indecisive around 1.1340 after a three-day uptrend to refresh the weekly top. In doing so, the major currency pair portrays the market’s mood during early Thursday morning in Europe.

In addition to the mixed concerns over the South African covid variant, dubbed as Omicron, a light calendar and “wait-and-see” mode ahead of the key US data also weigh on the EUR/USD prices of late. Adding to the trading filters is the lack of market volume amid the year-end holiday season.

Among the positives are firmer German 10-year Treasury yields that refreshed monthly top amid optimism over the Omicron vaccines/pills and the market’s lack of reaction to the firmer US data. Further, positive updates concerning the US President Joe Biden’s Build Back Better (BBB) stimulus plan and studies showing that infection with Omicron is significantly less likely to result in hospitalization also keep the EUR/USD buyers hopeful.Alternatively, China’s biggest-ever lockdown in Xi’an and the White House doubts over the availability of Pfizer’s pill, joined by French rejection to Merck’s drug, challenge the market sentiment and the pair buyers. On the same line is the ECB policymakers’ comparatively less hawkish outlook towards the 2022 moves than the Fed members.

Amid these plays, US 10-year Treasury yields seesaw around 1.457% after declining for the first time in three days on Wednesday whereas the S&P 500 Futures struggle to copy the Wall Street’s gains, up 0.05% around 4,687 by the press time. That said, the US Dollar Index (DXY) grinds lower during the four-day downtrend.Given the scheduled releases of  the US PCE inflation and Durable Goods Orders for November, EUR/USD traders may witness a sluggish session ahead of the data unless any surprises from Omicron and US stimulus erupt, which are less likely.

Technical analysis

EUR/USD bulls need a daily closing beyond the descending resistance line from November 30, at 1.1350 by the press time, to keep the reins. Otherwise, a pullback towards 1.1230 can’t be ruled out.