KEY POINTS OF THE ARTICLE:

• Concerns and questions on both sides of the Atlantic
• Euro consolidates above 1.1745

CONCERNS AND QUESTIONS ON BOTH SIDES OF THE ATLANTIC

On Monday, the euro against the dollar reached its highest level in a week due to the weakness of the dollar. The single currency's gains were contained by European economic concerns after the Bundesbank, in its monthly economic report, said Germany's economy could stagnate or even contract in the fourth quarter after a spike in Covid infections forced the government to impose new restrictions. EUR/USD was also under pressure after Germany's economy minister said on Monday that Germany had to live with "considerable restrictions" for at least the next four to five months in an attempt to slow the rise in price. arrow of new Covid infections.

But the situation is not much better in the United States. The United States reported at least 100,000 new Covid infections a day for twelve straight days through Sunday. California reinstated a ban on many indoor businesses across the state on Monday, and its governor a warned that he might impose a curfew. Michigan ordered a three-week partial shutdown, while the states of Oregon, Washington and New Jersey tightened restrictions. Even the governor of Iowa, long resistant to virus rules, has issued a mask-wearing requirement.

Additionally, Monday's U.S. economic data was negative for the Dollar after the Nov Empire U.S. Manufacturing Survey's General Business Conditions Index unexpectedly fell from -4.2 to a lower 6.3. than expectations of +3.0 at 13.5.

In this context, Moderna's announcement of very positive tests on their vaccine had little impact on the currency market. Traders seem more focused on the impact of short-term news.

EURO CONSOLIDATES ABOVE 1.1745

The euro is moving in a broad horizontal channel between 1.1610 and 1.2000. Intermediate support appeared at 1.1745 where the European currency rebounded last Wednesday. The Euro is supported by the 13-period moving average but is facing resistance at 1.1870. If broken, the pair could rally resistance at 1.1920, the last hurdle before 1.2000.

Below 1.1745, a short-term negative bias would prevail with a possible return to 1.1610.

Evolution of the euro against the dollar in 4H data: