EUR/USD Forecast: Going nowhere in a hurry, German macro data eyed for some impetus


  • EUR/USD regained some traction on Monday, albeit struggled to capitalize on the move.
  • The risk-on mood undermined the safe-haven USD and remained supportive of the uptick.
  • Investors eye key German macro data for some impetus ahead of Jackson Hole Symposium.

The US dollar came under some renewed selling pressure on the first day of a new trading week and assisted the EUR/USD pair to gain positive traction. The global risk sentiment got a strong lift from positive news on a potential vaccine and treatment for the highly contagious coronavirus disease. The upbeat market mood undermined the greenback's relative safe-haven status and was seen as one of the key factors behind the pair's modest intraday uptick.

The Financial Times reported that the Trump administration is considering fast-tracking an experimental COVID-19 vaccine being developed by AstraZeneca and Oxford University for use in the United States ahead of the November 3 elections. Adding to this, the US Food and Drug Administration (FDA) on Sunday said that it has issued emergency authorization to use blood plasma from recovered patients to treat certain patients suffering from the COVID-19 virus.

Meanwhile, the intraday USD weakness remained limited as investors refrained from placing aggressive bets ahead of a speech by the Fed Chair Jerome Powell at the Jackson Hole symposium later this week. This coupled with a goodish bounce in the US Treasury bond yields extended some additional support to the greenback and capped the pair, instead led to an intraday pullback of around 65 pips. The pair finally settled nearly unchanged for the day, just below the 1.1800 mark.

On the trade-related front, the US Trade Representative’s Office said in a statement that both the US and China see progress made on resolving issues in phase one trade deal between the two countries. The development further boosted investors' confidence and helped the pair to catch some fresh bids during the Asian session on Tuesday. Despite the two-way price moves over the past 24-hours, the pair remains bounded well within the last week’s trading range, awaiting breakout.

Market participants now look forward to the release of the final German GDP print for the second quarter of 2020 and the closely-watched German Ifo sentiment survey. A softer reading will be seen as early signs that the Eurozone economic recovery is losing momentum and pave the way for an extension of the recent corrective slide from two-year tops. Later during the early North American session, the release of the Conference Board's US Consumer Confidence Index will also be looked upon for some meaningful trading opportunities.

Short-term technical outlook

From a technical perspective, nothing seems to have changed much and the pair is more likely to prolong its consolidative price action. Hence, any meaningful slide is more likely to find decent support near last week’s swing low, around the 1.1755 region. Some follow-through weakness might turn the pair vulnerable to accelerate the fall back towards testing sub-1.1700 level, or monthly lows set on August 3.

On the flip side, the 1.1850-60 region now seems to have emerged as an immediate hurdle, above which bulls are likely to aim for a move beyond the 1.1900 mark. A subsequent positive move has the potential to lift the pair further towards the 1.1940-50 supply zone, above which the momentum could further get extended towards the key 1.2000 psychological mark.

fxsoriginal

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD failed to recover above 1.2100

The shared currency remains under selling pressure against its American rival, trading in the 1.2080 area. Market players waiting for more hints in the form of April Retail Sales.

EUR/USD News

GBP/USD under pressure below 1.4050 amid renewed USD demand

GBP/USD trades pressured below 1.4050, as the US dollar remains broadly bid amid risk-off sentiment. Rising inflationary pressures and Brexit jitters over NI keep investors on the edge. Bailey's speech, US data in focus.

GBP/USD News

XAU/USD respects the 10-day EMA

Gold could be on the verge of a lower low, but the hourly time frame is key. The hourly support structure is guarding a break to test bullish commitments at 1,800. The 10-day EMA and confluence of the 50% mean reversion are also offering support. Gold Weekly Forecast: XAU/USD could target 200-day SMA

Gold News

Yearn Finance Price Forecast: YFI eyes consolidation after quick surge

Yearn Finance price tagged the channel’s upper trend line yesterday, falling just short of $100,000 and 261.8% Fibonacci extension target at $102,900. The sharp reversal from the trend line marks a significant turning point for YFI that will shift price action to consolidation from the uptrend beginning at the April 25 low. 

Read more

US markets lead the recovery as jobless claims decline

Ongoing inflation fears remain, yet improved jobless claims help lift spirits in the US. Meanwhile, UK reopening stocks have been dealt a blow after SAGE claimed that a rise in the Indian Covid strain could slow the pace of lockdown easing. 

Read more

Majors

Cryptocurrencies

Signatures