The EUR/USD currency pair successfully broke its early-day narrow range and hit the fresh intra-day highs towards 1.1780 level. However, the reason for the gains in currency pair could also be attributed to the broad-based U.S. dollar bearish bias, backed by virus pains in the U.S., and by the Job losses in the U.S. manufacturing sector, continuing to spark worries that the second wave of COVID-19 cases could further undermine the U.S. economy.
On the other hand, the rising number of coronavirus in Europe became the key factor that kept the lid on any additional currency pair gains. At the moment, the EUR/USD currency pair is currently trading at 1.1784 and consolidating in the range between 1.1752 and 1.1786. Moving on, the currency pair buyers seemed cautious to place any strong position ahead of Spain's Unemployment Change and the Eurozone Producer Price Index.
At the data front, the US ISM Manufacturing PMI figure rose to a 15-month top of 54.2 in July, while the employment sub-index remained well below 50%, which suggested that companies in the U.S. continued to decrease jobs in July. However, this previous day released data that put brakes on the U.S. dollar's recovery sentiment and contributed to the currency pair gains.
Despite the rising number of cases, Trump will reopen the country while saying during his latest White House press conference that the permanent lockdown was not a workable plan to fight COVID-19. As well as, he also gave hopes about the virus vaccine while saying that "we will likely have a coronavirus vaccine far in advance of the end of the year." This fresh optimism challenged the risk-off market sentiment. This, in turn, the equity market started to flash green, which also undermined the broad-based U.S. dollar.
At the USD front, the broad-based U.S. dollar failed to maintain its early-day mild gains and reporting losses on the day as the United States still facing virus woes and struggled to control a spike in coronavirus cases, witnessed by the Job losses in the U.S. manufacturing sector, which eventually destroyed hopes for a quick economic recovery. However, the losses in the U.S. dollar helped the currency pair to stay higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies was stood at % 93.498.
Apart from this, Spain's health ministry confirmed yesterday that 968 new coronavirus infections have emerged in the past 24 hours. Moreover, the report revealed that the total number of confirmed COVID-19 cases rose from Friday's figures of 288,522 to 297,054 on Monday, which impacted the shared currency's performance against its peers capped the further upside in the pair.
The market players will closely follow Spain's Unemployment Change and the Eurozone Producer Price Index, which are scheduled to release during the European trading hours on the day. Afterward, the focus will shift to the U.S. Factory Orders data for June.
Daily Support and Resistance
S1 1.1569
S2 1.1658
S3 1.1709
Pivot Point 1.1747
R1 1.1798
R2 1.1836
R3 1.1925
The EUR/USD is trading at 1.1799 level, and it seems to break over the resistance level of 1.18000 level soon. If this happens, the EUR/USD pair may go after targeting the next resistance level of 1.1903 level, which is 100 pips far from here. However, the closing of candles below 1.1800 level can trigger selling in the pair. Considering the RSI and 50 periods EMA, both of the indicators suggest bullish bias; therefore, we should be looking for a buy trade over the 1.1795 area today. Good luck!