Euro rejected again at key level

The Euro is down by around 50 basis points against the US dollar as the European trading session gets underway, reversing Wednesday's gains which pushed the EUR/USD currency pair to to its highest levels since November 30.

Today is the last day for economic data before the year ends and with no news due out of Europe, the market will await the US Department of Labor's weekly Initial Jobless Claims report and the ISM Chicago's PMI for December to finish off the trading year.

Most investors are currently brushing off economic news and are instead focused on developments regarding the new strain of the coronavirus, namely omicron, and as the days go by, it is becoming clearer, that although the new virus is highly contagious, it is not as deadly as the Delta variant, and many predict it will only cause a minor glitch in the current economic recovery.

“Although Omicron cases in the US and Europe, amongst others, continue to surge, it has yet to make its presence felt negatively in economic data. With market activity much reduced for the holiday season, investors continue to price in a global recovery, hitting a minor bump, not a pothole, markets are overwhelmingly pricing in the latest variant as a milder incarnation, despite its easier contractibility.” said Jeffrey Halley, an analyst at Oanda.

On the chart we can once again notice that the EUR/USD currency pair was solidly rejected at the $1.1354 resistance mark for a second day in a row and unless the economic data due for release from the US today comes in well short of expectations, it is hard to see this critical level being breached.

That being said, there is still major support for the Euro at $1.1300 so any losses will be limited and that should remain in place until the end of the session as investors close their trading books for the year.