The EUR/USD currency pair extended its previous sessions winning streak and hit the 3-month high above 1.1200 marks while represented 37% gains on the day mainly due to the risk-on market sentiment, which exerted some positive impact on the shared currency and contributed to the currency pair gains.
The reason for the currency pair gains could also be attributed to the broad-based U.S. dollar selling bias triggered by optimism about a global economic recovery from Coronavirus COVID-19. At this moment, the EUR/USD currency pair is currently trading at 1.1208 and consolidating in the range between 1.1166 and 1.1213. However, traders are keenly awaiting the Eurozone Services PMI ahead of placing any strong position. The main catalysts behind EUR/USD’s rally were the U.S. dollar dynamics, with the macro updates from both regions offering little impetus to the markets.
At the USD front, the broad-based U.S. dollar drew offer on the day, and reason could be associated with the risk-on market sentiment triggered by the intensifying optimism about a global economic recovery from Coronavirus COVID-19. Investors are getting confidence from the news that most countries were easing lockdown measures and restarting their economies despite the growing number of COVID-19 cases. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped 0.24% to 97.427 by 11:49 PM ET (4:49 AM GMT).
On the other hand, U.S. President Donald Trump did not give any significant heed to its previous day’s decision about using Federal militaries to stop the on-going protests near White house, which instantly fueled the risk-on market sentiment and contributed to the currency pair gains.
At the coronavirus front, the number of confirmed coronavirus cases increased to 182,370, with a total of 8,551 deaths so far. Daily, the cases rose by 342 in Germany on the day against Tuesday’s +213 while the death toll rose by 29 as per the German disease and epidemic control center, Robert Koch Institute (RKI). Despite the growing number of COVID-19 cases, the investors cheered the news that most of the countries were easing lockdown measures and restarting their economies.
Looking forward, the Unemployment Rate data from the euro region will be critical to watch for fresh impetus. Later in this day, the ADP Employment Change and the ISM Non-Manufacturing PMI data will be featured in the U.S. economic docket. The traders will also keep their eyes on the Euro area Final Services PMIs and German jobs data. The G7 conference call is scheduled to happen later, which will also remain in focus, as all eyes remain on Thursday’s European Central Bank (ECB) monetary policy decision for the next direction in the pair.
Daily Support and Resistance
Pivot Point 1.116
The bullish bias of the EUR/USD pair extends to support the bullish trend in the pair on Wednesday. The bullish bais has driven the EUR/USD prices higher towards 1.1204 level. The EUR/USD pair is expected to face immediate support at 1.1150 level, whereas the resistance stays at 1.1236 mark. The overall trend seems bullish, but we can expect a slight retracement unto 1.1180 level ahead of further buying in the EUR/USD. Consider buying above 1.116 and selling below the same. Good luck!