EUR/USD hits four week highs above 1.1830 as US dollar slides

• Euro rises further versus the US dollar, hit monthly highs.
• If it holds above 1.1830, EUR/USD could extend gains over the next sessions.

The EUR/USD rose further and recently climbed above 1.1830, reaching the highest level in four weeks. The pair holds near the top, consolidating important daily gains supported by a weaker US dollar across the board.

The US Dollar Index is testing the October low, at the 93.00. It is falling 0.45% as the Dow Jones gains 0.68% and the Nasdaq 0.30%. The greenback weakened against all of its rivals extending losses versus the euro and the Swiss franc and trimming gains against commodity and emerging market currencies.

The decline took place as investors look for the results in negotiations for a new round of fiscal stimulus in the US. Economic data showed a rebound in Building Permits and Housing Starts, but it was ignored by market participants.

Levels to watch

The EUR/USD is rising for the third consecutive day, for the moment consolidating above the previous monthly high, suggesting more strength ahead. It peaked on Tuesday at 1.1840, the highest since September 21. The next resistance level might be seen around 1.1870, followed by 1.1900 and 1.1920.

A retreat back under 1.1830 could suggest the euro is not ready for further gains. Support levels might be seen at 1.1795 and 1.1755. The critical obstacle is located at 1.1695; a consolidation below would open the doors to more losses.

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