• EUR/USD attracts buyers for the fourth consecutive day amid sustained USD selling bias.
• The divergent Fed-ECB policy outlooks favor bulls and back the case for additional gains.
• A sustained strength beyond the 200-day SMA is needed to validate the positive outlook.

The EUR/USD pair prolongs its uptrend for the fourth consecutive day and climbs beyond the 1.1600 mark, to a one-and-a-half-week top, during the Asian session on Thursday. The momentum is sponsored by the prevalent selling bias surrounding the US Dollar (USD), and lifts spot prices closer to a technically significant 200-day Simple Moving Average (SMA) pivotal resistance.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, slides to an over one-week trough amid dovish Federal Reserve (Fed) expectations. In fact, traders are now pricing in around an 85% chance that the US central bank will lower borrowing costs again in December, and the bets were lifted by recent comments from several Fed officials. Moreover, a mixed set of economic indicators released this week does little to temper expectations. This, along with the upbeat market mood, is seen undermining the safe-haven buck and, in turn, acting as a tailwind for the EUR/USD pair.

The shared currency, on the other hand, draws some support from the European Central Bank’s (ECB) cautious monetary policy outlook. ECB Vice President Luis de Guindos sounded slightly more positive on growth and said on Wednesday that the current level of rates is the correct one. Adding to this, Croatian central bank chief Boris Vujcic noted that the ECB should only cut rates again if price growth is heading below target without rebounding. Furthermore, ECB's Chief Economist Philip Lane said that a slowdown in non-energy inflation is needed to keep overall price growth near the 2% target.

Meanwhile, a majority of economists expect that the ECB will hold its deposit rate this year and see no change by the end of next year. This, in turn, favors the Euro (EUR) bulls and suggests that the path of least resistance for the EUR/USD pair is to the upside. However, it will still be prudent to wait for a sustained strength beyond the 200-day SMA barrier, currently pegged near the 1.1625 region, before positioning for any further appreciating move. Furthermore, relatively thin trading volumes on the back of the Thanksgiving Day holiday in the US warrant some caution for bullish traders.