The EUR/USD currency pair succeeded in extending its previous winning streak and hit the session's high around 1.1337 level while represented 0.30% gains on the day. The surge in currency pair could be attributed to the upbeat trading sentiment, which undermined the broad-based U.S. dollar and contributed to the currency pair gains. Optimistic remarks by French Finance Minister Bruno Le Maire about the country's consumption activity also helped currency pair to hit the session's high. At the press time, the EUR/USD currency pair is currently trading at 1.1332 and consolidating in the range between 1.1303 - 1.1337. However, the traders seemed cautious to place any strong position ahead of European Central Bank's (ECB) rate decision, which is scheduled to happen on Thursday.
As per the analysts at Danske Bank, "We expect a repetition of recent comments from various governing council members, thereby striking a cautiously optimistic tone compared to the June projections. We also expect they may decide not to use the EUR 1,350 billion pandemic emergency purchase program (PEPP) envelope in full. No new actions are expected next week," Besides this, Danske Bank analysts believed that markets might not be prepared for a "less dovish" result.
However, the Eurozone sees a recovery in economic activity, backed by the lifting of the lockdown measures, which also added strength to the shared currency. Therefore, the ECB is not expected to boost stimulus this week or hint any additional easing and may sound less dovish, which could help the shared currency pick up a strong bid.
However, the bullish sentiment surrounding the shared currency was further bolstered by the fresh reports of French Finance Minister Bruno, who suggested that the country's consumption activity was just 5% lower than normal.
Apart from this, the upbeat market sentiment was supported by the hopes about the coronavirus vaccine, which overshadowed the fears of the virus's resurgence during the late last week. Moreover, the risk-on market sentiment was further bolstered by the hopes of further stimulus from the U.S. due to the downbeat Producer Price Index (PPI), also backed by the comments from the President and CEO of the Federal Reserve Bank of Dallas Robert Kaplan.
Despite the ever-increasing number of new coronavirus cases and the possibility of renewed lockdowns, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day. However, the losses in the U.S. kept the pairs' prices high. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.17% to 96.448 by 10:03 AM ET (3:03 AM GMT).
In the absence of the major data/events to be released on the day, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum. As well as, the traders will keep their eyes on the news concerning China.
Daily Support and Resistance
S1 1.1153
S2 1.1223
S3 1.1261
Pivot Point 1.1293
R1 1.1331
R2 1.1363
R3 1.1433
The EUR/USD pair is trading in an upward channel, which is 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!