Due to release of the minutes of the European Central Bank’s December meeting the common European currency appreciated against the buck by 0.87% just in couple of hours and reached the weekly PP at 1.2040.
In result of this surge, the pair has formed little ascending channel, which presupposes continuation of the upward movement at least until publication of information on the American inflation and retail sales.
These events are expected to cause notable volatility in the markets. However, even in case the data misses expectations the rate is unlikely to break through the two-year high located at the 1.2093 level.
From this perspective, the bearish movement towards the monthly PP and the bottom trend-line of a two-month long ascending channel is still considered to be the most likely scenario in the medium term.