The EUR/USD currency pair extended its early-day gains and rose further to 1.1290 level ahead of the much-awaited negotiations on the European Union’s (EU) long-term budget. However, the modest gains in the currency pair were supported by the hopes of a recovery package from the European Council president Charles Michel.
On the other hand, the downbeat German Industrial data, as well as the gloomy European Commission’s economic forecasts, become the key factors that kept a lid on any additional gains in the currency pair. Whereas, the broad-based US dollar strength backed by the risk-on market sentiment also exerted some downside pressure on the currency pair. Moreover, the rising number of coronavirus cases weighed on the European equities which undermined the shared currency.
The nervous mood in the European stock futures could be associated with the dovish comments made by the European Commission that “the EU economy will experience a deep recession this year due to the coronavirus pandemic, despite the swift and comprehensive policy response at both EU and national levels.” However, these discouraging EU economic forecasts continue to weigh on the EUR/USD pair.
The EUR/USD is trading above a strong support level of 1.1265 level, and closing the Doji and bullish engulfing candle above this level may drive the buying trend in the EUR/USD pair. On the higher side, the next resistance is likely to be found around the 1.1303 level. But in case, the pair violates 1.1265 support, the next support is likely to stay around 1.1225 level.
Entry Price – Buy 1.12889
Stop Loss – 1.12489
Take Profit – 1.13289
Risk to Reward – 1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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