EUR/USD sticks to gains above 1.2200 handle after mixed US data

The EUR/USD pair held on to its strong gains near the 1.2330-35 region and had a rather muted reaction to the US economic releases. 

The US Dollar failed to gain any respite after today's mixed US economic data that showed housing starts contracted 8.2% to 1.192 million in December, while building permits bettered expectations and unexpectedly rose to 1.302 million during the reported period.

Separately, weekly jobless claims also bettered expectations and declined more than expected to 220K during the week ended January 12. The positive reading, however, was negated by a larger than expected retracement in the Philly Fed Manufacturing Index, coming in at 22.2 for January as against a reading of 25.0 expected. 

Against the backdrop of concerns over a possible government shutdown, today's softer data did little to lend any fundamental support to the greenback and remained supportive of the pair's steady up-move through the early NA session.

Technical outlook

Mario Blascak, European Chief Analyst at FXStreet writes, “the oscillators including the Relative Strength Index and Momentum are pretty neutral with Slow Stochastics nearing the Overbought territory. The Relative Strength Index and Momentum are pointing downwards, favoring the corrective move sideways on EUR/USD.”