The EUR/USD currency pair registered a 3-day winning streak and remained well bid around 1.1351 level while representing modest gains. The surge in currency pair could be attributed to the heightened expectations for an E.U. fiscal stimulus plan. The bullish bias in the currency pair could also be associated with the reports that the German economy was showing signs of bottoming out. On the other hand, the broad-based U.S. dollar strength backed by the coronavirus concerns became a critical factor that kept the lid on any additional gains in the currency pair and dragged the EUR/USD pair down the session high. At this time, the EUR/USD currency pair is currently trading at 1.1341 and consolidating in the range between 1.1336 - 1.1353.
As per the latest report, the German Economic Ministry confirmed that the economic fall towards the lowest point was now over, and the road to recovery started. As per the keywords, "Industrial production has passed its lowest point. An increase in received orders indicated output would pick up in the coming months. But risks exist particularly in very slack demand from outside the euro area. There will be GDP growth from Q3 onwards." However, this upbeat statement initially helped the pair to stay on the session high, but later pair trimmed their early-day gains amid broad-based U.S. dollar recovery.
It is worth recalling that there are signs of green shoots in the Eurozone's largest economy. For example, German industrial production orders increased by 10% in May, after April's record drop, the official data released on Monday showed.
Considering the recovery of Eurozone's largest economy, the European Central Bank has little reason to increase stimulus or sound extra dovish this Thursday. Simultaneously, the European Union leaders were trying to lessen the differences between countries over a stimulus package. However, the second meeting may be required if the upcoming meeting doesn't provide positive results in an agreement, as per the German Chancellor Merkel announced on Monday.
However, the worries over the resurgence of the Covid-19 virus exerted bearish pressure on the risk sentiment and underpinned the board-based U.S. dollar. As per the virus report, the U.S. recorded 59,747 new infections in the last 24 hours, as per the Johns Hopkins University. At the same time, the total number of cases in the U.S. rose to 3,479,483 figures.
Global figures crossed over 13 million, with more than 565,000 people died in the last 7-months due to the virus, as Global institute reports' tally. On the other hand, Brazil and India also followed the footstep of the U.S. They became nations with the 2nd highest number of appearing cases after the U.S. The latest figures from Florida suggested over 15,000 new cases on Sunday after the further push for schools to re-open and anti-mask protests.
As in result, the broad-based U.S. dollar took modest bids and edged higher on the day as investors turned to the safe-haven in the wake of an intensified tussle between US-China and virus woes. Although, the modest gains in the U.S. dollar kept the currency pair lower. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.03% to 96.537 by 9:36 AM ET (2:36 AM GMT).
Moving on, the EUR/USD currency pair could face selling bias if the risk sentiment worsens, which will help the U.S. dollar to gain further traction and send the currency pair down. Whereas, the above-forecast Zew survey expectation (a forward-looking indicator) could put a strong bid under the shared currency, which will push EUR/USD well above key resistance at 1.1349.
Looking forward, the market traders will look forward to the upcoming data, which will highlight the Germany CPI, HICP, ZEW economic sentiment, ZEW economic conditions, Swiss producer/import price index, E.U. industrial production, ZEW survey expectation which are scheduled for release during the European trading hours. On the other hand, the focus will be on the U.S. core CPI, CPI real weekly earnings, Redbook.
Daily Support and Resistance
Pivot Point 1.134
The EUR/USD pair is trading in an upward channel, supporting the pair around 1.1280 level. Above this, the next target is likely to be around 1.1365. A bullish breakout of this level can lead to EUR/USD prices further higher until the 1.1425 level. Besides, the bearish breakout of the 1.1262 level can trigger selling until 1.1262 level. The MACD and RSI are in a buying zone, while 50 EMA is also suggesting bullish bias. Let's look for buying traders over 1.1293 level today. Good luck!