The EUR/USD currency pair remained positive near the 1.1900 level after hitting the 1.1930 level during the Asian trading hours. However, the bullish bias around the currency pair was supported by the weak U.S. dollar. The improvement in the German virus data underpinned the shared currency and contributed to the currency pair gains. In the meantime, the risk-on market sentiment buoyed by the better-than-expected China Manufacturing and Non-Manufacturing PMI figures for August also boosted the sentiment around the currency pair. At the moment, the EUR/USD currency pair is currently trading at 1.19010 and consolidating in the range between the 1.1893 - 1.1929.
The risk-on market sentiment remained supportive by the optimism over the coronavirus (COVID-19) vaccine/treatment. However, the hopes of the vaccine were also bolstered by the U.S. health official Dr. Fauci's positive comments. As well as, U.S. President Donald Trump also pushed for the pandemic's cure, which kept the market trading sentiment positive.
Apart from this, the reason for the upbeat market sentiment could also be associated with positive China and Japan data. As well as, the Federal Reserve's recent decision to adopt a more relaxed approach to control inflation also favored the risk-on market tone. The talks concerning the U.S. coronavirus (COVID-19) stimulus packages also helped the market risk-tone. Let me tell you that the opposition Democratic Party responded positively to take a $1.3 trillion offer, which fueled the hopes of U.S. economic recovery.
The S&P 500 Futures hit the record high above 3,500. Moreover, the U.S. 10-year Treasury yields remained flat around 0.72%. This, in turn, undermined the safe-haven U.S. dollar and contributed to the currency pair gains.
The broad-based U.S. dollar extended its previous losing streak and dropped on the day due to the downbeat Core PCE data at the USD front. As well as, the Fed Chair's Average Inflation Targeting (AIT) strategy, allowing inflation to go high past-2.0% target, also weighed on the U.S. dollar and extended support to the oil prices. However, the losses in the U.S. dollar kept the oil prices higher as the price of oil is inversely related to the price of the U.S. dollar. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped by 0.09% to 92.293 on the day.
At the coronavirus front, the number of coronavirus cases increased to 242,381, while the total number of deaths reached 9,298 figures. Whereas, the cases rose by 610 in Germany on the day while the death toll increased by three as per the German disease and epidemic control center, Robert Koch Institute (RKI) report. However, the daily cases dropped for the 2nd-straight day, which boosted the shared currency's bullish sentiment and contributed to the currency pair gains. The reason could also be traced by the statements that Chancellor Angela Merkel and 16 regional leaders decided to ban major public gatherings and impose a national fine for mask shirkers.
Looking ahead, the market traders will keep their eyes on the Japanese Unemployment Rate for fresh direction. In the meantime, Japan's Final Manufacturing PMI will also be key to watch. In the meantime, the updates surrounding the fresh Sino-US tussle, this time over the South China Sea, as well as the coronavirus (COVID-19) updates, could not lose their importance.
Daily Support and Resistance
Pivot Point 1.1893
The EUR/USD is trading slightly bullish at 1.1900 level, having an immediate resistance at 1.1918 level and support at 1.1896 level. On the higher side, a bullish breakout of the 1.1920 level can trigger buying until the 1.1955 level. Conversely, a bearish breakout of 1.1896 level can drive selling until 1.1835 support. Gold luck!