- EUR/USD clinches fresh 2020 highs near 1.2090 on Wednesday.
- Fresh vaccines news bolsters the risk-on trade early in Europe.
- German Retail Sales expanded 2.6% MoM in October.
Following earlier new 2020 highs in the 1.2090 region, sellers appears to have stepped in and motivate EUR/USD to correct lower to the mid-1.2000s on Wednesday.
EUR/USD propped up by risk appetite
EUR/USD posted the largest single day gain since March on Tuesday, advancing around 1.20% and extending the march north well past the psychological 1.20 hurdle. Earlier on Wednesday, EUR/USD reached fresh 2020 highs in levels just shy of 1.2100 the figure, area last seen in April 2018.
As usual in past weeks, the single currency met extra support from increasing investors’ appetite for riskier assets, in turn sustained by fresh US stimulus rumours and vaccine news.
In addition, Tuesday’s performance in EUR futures markets left the door open for the continuation of the uptrend, at least in the very near-term.
Earlier in the calendar, the German Retail Sales expanded at a monthly 2.6% in October, surpassing expectations. In the broader Euroland, Producer Prices rose 0.4% MoM during the same period and the unemployment rate ticked lower to 8.4%.
In the US data space, the November’s ADP report is due seconded by weekly MBA’s Mortgage Applications, the EIA’s report on crude oil stockpiles, the Fed’s Beige Book and the second testimony by Chief Powell, this time before the Committee on Financial Services at the House of Representatives.
In addition, FOMC’s members R.Quarles, J.Williams and P.Harker are all due to speak later in the session.
What to look for around EUR
EUR/USD advanced to new YTD peaks around 1.2090 on Wednesday, leaving the door open to a potential test of the 1.2100 mark in the short-term horizon, always against the backdrop of a favourable atmosphere in the risk complex. In the very near-term, EUR/USD appears supported by prospects of a strong recovery in the region along with the increasing likelihood of extra stimulus in the US. Risks to this positive view emerge from the potential political effervescence around the EU Recovery Fund and increasing chances of further ECB easing to be announced as soon as at the December meeting.
EUR/USD levels to watch
At the moment, the pair is gaining 0.12% at 1.2053 and a break above 1.2087 (2020 high Dec.2) would target 1.2413 (monthly high Apr.17 2018) en route to 1.2476 (monthly high Mar.27 2018). On the flip side, immediate contention emerges at 1.1920 (high Nov.9) seconded by 1.1800 (low Nov.23) and finally 1.1745 (weekly low Nov.11).
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays near 1.0800 after upbeat US data
EUR/USD stays under modest bearish pressure and trades near 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.