EUR/USD: USD leads gains and puts pressure on EUR

December was relatively calm for the EUR/USD. However, this week is expected to be busier for the main currency pair.

Traders will be watching the data released on the US economy throughout this week, as well as the minutes of the latest FOMC meeting and the long-awaited NFP report.

Technical Analysis - 4 hour time frame chart

On the 4-hour chart, it is possible to see that we are facing a consolidation zone in which it ended up marking the entire month of December.

During today's session buyers still tried to break below the range, but without success. If the current (bearish) sentiment prevails, then the EUR/USD pair could again test the lower bound of consolidation.

EUR/USD, 4 hours time frame chart. Source: xStation 5

US dollar Index (USDIDX)

The US Dollar Index (USDIDX) has been sideways for more than 1 month, just like the EUR/USD pair.

However, one should not rule out the possibility that the US dollar will continue to appreciate as the chart pattern's technical target - head and shoulders - has not yet been reached.

USDIDX, 4 hours time frame chart. Source: xStation 5

During this session, USD leads gains.

Source: currency-strength.com

Henrique Tomé, XTB Portugal