EUR/USD: the euro is shy about crossing over 1.12, but the overall trend remains positive - key levels to look out for

The EURUSD pair posted a sharp rebound on Monday, after a resolutely bearish start to the year last week.

After a daily low at 1.1154, the pair indeed peaked at 1.1206. The rise was clearly aided by the economic calendar, with several European statistics that were surprisingly positive.

Indeed, German Retail Sales, and later on the Eurozone Final Services PMI for December, all came out above expectations. This helped to partially offset the potentially bearish impact of negative risk sentiment generated by fears about a potential slippage in tensions between Iran and the US in the Middle East.

It should be noted, however, that the pair has been unable to hold above the psychological threshold of 1.12, reducing the immediate upside potential. On the other hand, although the pair has been reluctant to move above 1.12, it has also failed to show any significant correction, settling for a low of 1.1155. 

From a technical point of view, it should be noted that despite the recent slight correction, the pair is still above its 200-hour moving average currently at 1.1140.

However, as long as this threshold is maintained, the pair's bottom profile will remain bullish overall from a chart analysis point of view.

In case of a break below this key pivot point, the psychological threshold of 1.11, and especially the 100-day moving average at 1.1062 will be the next potential bearish support levels and targets to consider.

If, however, the pair manages to resume its upward movement and confirm a break above the psychological threshold of 1.12, we could possibly aim for the end-of-year peak at 1.1241 and then the psychological threshold of 1.13.

Currently, the EUR/USD pair is trading around 1.1158 on the forex.

Daily EUR/USD chart