EUR/USD stays indecisive above 1.1300 as risk-on battles Christmas Eve

• EUR/USD pares intraday losses during a sluggish Asian session.
• Firmer US data propelled yields but concerns over Omicron, stimulus keep buyers hopeful.
• Off in multiple bourses can restrict intraday moves, beware of spikes during thin volumes.

EUR/USD picks up bids to consolidate intraday losses around 1.1330, down 0.05% during early Friday.

The major currency pair snapped three-day advances the previous day but closed with minor losses. That said, the quote remains sluggish as mixed concerns over the key risk catalysts join the Christmas Eve-linked market inaction.

Among the key positives are the global studies showing the fewer odds of hospitalization due to the South African covid variant, dubbed as Omicron. The US Food and Drug Administration’s (FDA) approval of Merck's Covid-19 pill, a day after approving Pfizer’s pill to battle the Omicron, also favor the risk-on mood and the EUR/USD buyers. Earlier in the week, US Military also conveyed news of developing a single cure for covid and all variants.

Alternatively, the French cancellation of orders for Merck’s pill, citing notably lesser effect than promoted, joins a steady rise in Omicron cases to challenge the market optimism and EUR/USD prices. Further, the US data that underpinned the US Treasury yields to refresh monthly high near 1.50% also weigh on the pair as the last comment from a Fed policymaker, namely Christopher Waller, were hawkish and signaled rate hikes in early 2022.

That said, upticks in the Fed’s preferred gauge of inflation, namely the Core PCE Price Index, not to forget Durable Goods Orders and Michigan Consumer Sentiment Index, favored the bond bears of late.

Elsewhere, indecision over US President Joe Biden’s Build Back Better (BBB) plan and China’s dislike for the American passage of a bill that highlights Uyghur minority issues, as well as rising covid cases in Europe and resulted activity restrictions, also challenge the risk-on mood and test the EUR/USD buyers.

As most American and European markets will remain closed on Friday, due to Christmas Holiday, thin market liquidity and a light calendar should play their role to restrict immediate EUR/USD moves.

Technical analysis

200-EMA on four-hour chart joins resistance line of a monthly symmetrical triangle to restrict short-term EUR/USD upside around 1.1350. However, the 100-EMA level of 1.1300 is likely to challenge the immediate downside, if not then a subsequent fall towards 1.1270 becomes imminent.