Euro flirts with monthly highs around 1.0960 prior to US data, Fedspeak.

The Euro alternates ups and downs against the US Dollar.European stocks keep the negative performance so far on Tuesday.Markets’ attention will be on US Consumer Confidence and Fedspeak.

The Euro navigates a tight range against the US Dollar, prompting EUR/USD to hover around the 1.0960 zone on Tuesday, just pips away from the monthly peak (1.0965 on November 21).

On the flip side, the Greenback trades in an equally inconclusive range in the low 103.00s when tracked by the USD Index (DXY), managing to regain some balance following early lows near the 103.00 support.

There are no changes to the monetary policy front, as investors continue to factor in the likelihood of interest rate cuts by both the Federal Reserve (Fed) and the European Central Bank (ECB) at some point in the spring of 2024.

On the domestic calendar, Consumer Confidence in Germany, measured by GfK, improved marginally to -27.8 in December, while Consumer Confidence in France edged higher to 87 in November.In the US docket, the Conference Board’s Consumer Confidence will take centre stage, followed by the FHFA’s House Price Index.

Additionally, Chicago Fed Austan Goolsbee (voter, centrist), FOMC Christopher Waller (permanent voter, hawk), FOMC Michelle Bowman (permanent voter, centrist), and FOMC Michael Barr (permanent voter, centrist) are all due to speak.

Daily digest market movers: Euro faces the next target at 1.1000

The EUR revisits the 1.0960 zone against the USD.US and German yields trade in a mixed tone on Tuesday.Markets see the Fed starting its interest rate cuts in Q2 2024.Investors’ consensus place the ECB extending its pause until H2 2024.BoE’s Dave Ramsden sees upside risks to UK inflation.ECB’s Joaquim Nagel does not rule out rate hikes if inflation picks up pace.RBA’s Michele Bullock kept the cautious tone earlier in the Asian session.

Technical Analysis: Euro keeps the constructive view above 1.0812

EUR/USD’s upside momentum appears so far limited by the area of monthly highs in the 1.0960-1.0965 band.

The November high of 1.0965 (November 21) is now the immediate goal for bulls ahead of the critical 1.1000 level. Further north, EUR/USD might face resistance around the August top of 1.1064 (August 10) and another weekly peak of 1.1149 (July 27), both of which precede the 2023 high of 1.1275 (July 18).

In the meanwhile, any corrective dips should find support initially at the key 200-day SMA at 1.0812, followed by the temporary 55-day SMA at 1.0665. South from here comes the weekly low of 1.0495 (October 13) prior to the 2023 low of 1.0448 (October 3).

Overall, the pair’s chances should remain strong as long as it stays above the 200-day SMA.What is the effect of the German Economy on the Euro.The German economy has a significant impact on the Euro due to its status as the largest economy within the Eurozone. Germany’s economic performance, its GDP, employment, and inflation, can greatly influence the overall stability and confidence in the Euro. As Germany’s economy strengthens, it can bolster the Euro’s value, while the opposite is true if it weakens. Overall, the German economy plays a crucial role in shaping the Euro’s strength and perception in global