During Monday’s early European trading session, the EUR/USD currency pair successfully extended its previous session bullish trend and kept gaining its positive traction around above the 1.1850 level due to the broad-based U.S. dollar weakness. The U.S. dollar weakness could be associated with the massive U.S. tech selloff. Moreover, the upbeat market sentiment, supported by optimism over a potential vaccine/treatment for the highly infectious coronavirus, also weighed on the safe-haven USD and contributed to the currency pair gains.
On the other hand, the French FinMin Le Maire’s positive comments over the French economy also gave some support to the shared currency, which pushed the currency pair intra-day high. Meanwhile, the shared currency was also being supported by Thursday’s decision of the European Central Bank (ECB). Apart from this, the investors seem to be avoiding the rise in coronavirus infections across the old continent. The EUR/USD is currently trading at 1.1867 and consolidating in the range between the 1.1831 – 1.1869.
The sentient around the shared currency is remained supportive by the comment from the ECB’s Villeroy that “We don’t target exchange rate”. Besides, the central bank’s President Christine Lagarde’s positive statement that Eurozone’s domestic demand had recorded a notable recovery from low levels also played a key role in underpinning the shared currency.
Finance Minister Bruno Le Maire said in an interview with France 2 television on the day that “The French economy is in the right direction.” He further added that “French economy could do better than 11 percent contraction currently forecast for 2020”. Thus, The common currency recently got some extra support from the above comments and hit the intra-day high level around above 1.1865.
On the other hand, the positive tone around the market trading sentiment undermined the safe-haven U.S. dollar, giving support to the currency pair. Despite the fears of no-deal Brexit and the Sino-American tussle, not to forget the record single-day increase in COVID-19 cases, the market trading sentiment extended its early-day positive tone and remained supportive by the weekend positive headlines suggesting the AstraZeneca’s restart of the coronavirus (COVID-19) vaccine trials. As in result, the S&P 500 Futures add 0.73% to 3,347 as of now. Considering the risk-barometers’ positive tone, the market’s safe-haven demand undermined, eventually weighing on the safe-haven U.S. dollar.
The reasons for the risk-on market trading sentiment could be attributed to the positive headlines concerning the coronavirus vaccine. The AstraZeneca showed readiness for resuming its vaccine trials after a brief “routine” pause. At the same time, Pfizer is confident about getting the pandemic’s cure by the year’s end.
As a result, the broad-based U.S. dollar stopped its overnight gains and started to flash red. Moreover, the U.S. dollar losses could also be associated with a selloff rally in U.S. tech stocks overnight. This, in turn, fueled worries about the recovery. However, the losses in the U.S. dollar kept the EUR/USD currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped by 0.16% to 93.192 by 11:57 PM ET (4:57 AM GMT).
Looking ahead, the market traders will keep their eyes on updates surrounding the Brexit, virus, and US-CHina tussle. Whereas, investors are also looking to the U.S. Federal Reserve’s policy meeting scheduled to take place on Wednesday. The EUR/USD continues to trade at 1.1835 level as the ECB decided to leave its interest rate unchanged in its Monetary policy meeting. On the higher side, the pair may find resistance at 1.1839 level and above this, the pair may find the next resistance at 1.1860 level along with support at 1.1828 level. Below 1.1828, the EUR/USD may find the next support at 1.1797 and 1.1755 level.
Entry Price – Buy 1.18562
Stop Loss – 1.18162
Take Profit – 1.18962
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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