Tomorrow Germany releases final December CPI and the markets are expecting a gain of 0.5% after a 0.3% rise during the previous month. In today’s economic bulletin, the ECB expressed confidence that the underlying euro area will rise gradually. If the German data doesn’t disappoint and signal a more robust growth in the largest European economy, the release may provide a fresh impetus for the single currency’s move.
In such circumstances, the EURUSD pair will try to overcome the key 1.1950-60 zone, opening the way to the 1.20 psychological mark. But as Friday is the last trading day of the year, some traders may partially close long euro positions following another potential rally. Therefore, the profit-taking slide may threaten the 1.19 threshold which is the key to the downside in the short-term.