The EUR/USD currency pair flashed green and took bids around above mid-1.1200 level while represented 0.13% gains on the day despite the risk-off sentiment in the trading market. The broad-based U.S. dollar erased some of its early-day gains and became one of the major factors keeping the currency pair higher. At the press time, the EUR/USD is trading at 1.1253 and consolidating in the range between 1.1225 and 1.1261.
Despite the hopeful result of the U.K.'s second vaccine trials and ongoing use of steroids called dexamethasone, several countries failed to stop the second wave of coronavirus, especially the U.S., Beijing, and Japan, where renewed cases were continuously increasing. Texas showed a record high jump in the hospitalization. Likewise, Florida, Arizona, and Oklahoma also showed further cases. Apart from this, Japan's virus figures rose to the highest since May 30. As in result, the U.S. 10-year Treasury yields still reported losses around 0.70%. While the Asian stocks also reported moderate losses by the press time.
Despite this, the U.S. dollar started to lose its early-day gains and became a key factor behind the currency pair gains. However, the broad-based U.S. dollar could take bids if the tensions between the U.S. and China over the Uighur bill further escalate. Let me remind, the U.S. President Donald Trump signed a bill called for sanctions against those responsible for the repression of Uighur Muslims in China's far western region of Xinjiang, the White House said in a statement.
At the USD front, the broad-based U.S. dollar failed to maintain its earlier gains and dropped below 97 levels despite the growing concern over the spike in COVID-19 cases in China and the U.S., which eventually turned out to be one of the key factors that kept currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.15% to 96.998.
Moreover, the reason for the currency pair gains could also be attributed to the optimism about the constant re-opening of Europe's economies and the ongoing monetary stimulus announced by the ECB, Germany, and the European Commission, which underpinned the shared currency and contributed to the currency pair gains. Looking forward, the market participant will keep their eyes on the European Union's monthly Economic Bulletin. The focus will be on the U.S. weekly jobless claims. Moreover, virus headlines and geopolitical headlines could not lose their importance.
Daily Support and Resistance
S1 1.1085
S2 1.119
S3 1.126
Pivot Point 1.1296
R1 1.1366
R2 1.1402
R3 1.1508
The EUR/USD currency pair's 50-day simple moving average (SMA) has already crossed above the 100-day SMA and moved toward crossing above the 200-day SMA in the next couple of days. The resulting golden crossover, the bull cross of 50- and 200-day SMAs, would be the first in six months. From the perspective of technical analysis theory, the golden cross is an indicator of the long-term bull market, which suggests that the technical traders may buy euros in the run-up to confirm the crossover. On the 4 hour timeframe, the EUR/USD pair is trading within a downward regression channel, which provides resistance at 1.1300 level and support at 1.1216 and 1.1160 level. The 50 EMA and RSI both are suggesting selling trends in the pair. Let's consider taking a selling trade below 1.1296 today. Good luck!