EUR/USD prints fresh highs, up for the third day in a row

The euro is rising against the US dollar for the third day in a row, as it continues to move away from multi-month lows it reached last week at 1.0517. EUR/USD recently rose to 1.0647, hitting a fresh daily high. 

It was trading at 1.0640, up 30 pips for the day despite better-than-expected US economic data. According to the second estimate of 3Q GDP, the economy rose at a 3.2% rate, above the 3.0% expected and the 2.9% that was informed previously. In a different report, consumer confidence (Conference Board) jumped from 100.8 to 107.1, significantly above the 101.2 of market consensus. On Wednesday the calendar shows a busy day regarding US indicators: ADP private employment, personal income and spending, Chicago PMI and pending home sales. 

Earlier in Europe, economic data showed a weaker-than-expected report on economic confidence and lower inflation in Germany. Tomorrow will be the turn of the Eurozone CPI.

EUR/USD outlook 

In the short-term, the pair continues to move with a slightly bullish bias, but still facing downside pressure. A consolidation on top of 1.0650 could open the doors to a more significant correction. 

Analysts from Danske Bank expect the US dollar to strengthen further in the short-term on a hawkish Fed and with the potential increase in US public spending but in the long-term, they see a recovery in EUR/USD based on fundamentals. “However, uncertainty looms large and while EUR/USD is likely to decline further in the first part of 2017, we see a considerable risk of high volatility in the cross”, analysts concluded.