EUR/USD: Probing 1.12 after biggest single-day gain since Aug. 5
- EUR/USD on Friday printed its biggest daily gain in nearly five months.
- Gold rally and the bullish setup on the weekly chart favor a strong move above 1.12.
- German data is expected to show retail sales rose 1% in November.
EUR/USD is attempting a convincing break above 1.12 amid broad-based US dollar weakness.
The currency pair is currently trading at 1.1196, representing a 0.20% gain on the day, having hit a high of 1.1210 in Asia.
Biggest daily gain in nearly five months
EUR/USD rose 0.72% on Friday, confirming the biggest single-day gain since Aug. 5. On that day, the single currency had rallied by 0.87%.
Markets offered US dollars on continued de-escalation of Sino-US trade tensions which weighed over the risk sentiment throughout 2019.
Gold rally and technicals favor upside
Dollar's bearish trend continued in Asia and looks to have legs, as gold, a hard currency, is reporting a 3% gain on a month-to-date basis in dollar terms and is expected to put on a good show next year. The trend in the gold market is widely used as an indicator to confirm the bullish/bearish price action in the US dollar.
EUR/USD's bullish case looks stronger with the weekly chart reporting an upside break of the trendline connecting September 2018 and June 2019 highs.
Focus on German data
The German data due at 07:00 GMT is expected to show consumer spending, as represented by retail sales, rose 1 percent month-on-month in November, following a 1.9% contraction in October.
An above-forecast reading would bolster the bullish case and will likely yield a strong move above 1.12.
A break above 1.12 may remain elusive if the German data misses estimates by a big margin.