EUR/USD defends 1.1200 as yields drop on coronavirus woes, ECB’s Lagarde eyed


  • EUR/USD prints mild gains but struggles to lure bulls around 16-month low.
  • Germany’s virus-led death toll crosses 100,000 mark, fears of virus variant spread.
  • DXY tracks yields to the south as Fed rate hike odds dwindle amid covid resurgence.
  • ECB’s Lagarde, Panetta eyed for fresh impulse, US traders’ reaction after holiday and yields will be important.

EUR/USD grinds higher during the most upbeat daily performance heading into Friday’s European session. The major currency pair seesaws around 1.1225, up 0.13% intraday, while cheering the downbeat yields despite covid woes in Europe.

Germany marks a jump in the coronavirus led deaths to cross the 100,000 mark. Reuters said, “Another 351 people have died from coronavirus, bringing the total since the start of the pandemic to 100,119, data from the Robert Koch Institute for infectious diseases showed. The number of new daily cases hit a new record of 75,961.” On the same line, Austria already announced local lockdowns due to the virus outbreak but French Health Minister Olivier Veran said on Thursday that they will not announce any new coronavirus-related lockdown or curfew, as reported by Reuters.

On a broader front, the World Health Organization (WHO) has called for a special meeting to discuss the new version of the virus and any fears emanating from it to confirm its status as a “variant of concern.” The chatters over the virus version spotted from South Africa, with a formal name of B.1.1.529, grow stronger and weigh on the risk appetite as it is said to be immune to the vaccines.

While portraying the mood, the US 10-year Treasury yields drop eight basis points (bps) to 1.565%, extending Wednesday’s pullback from the monthly peak whereas the S&P 500 Futures mark 1.0% downside at the latest. That said, the US Dollar Index (DXY) drops 0.08% to 96.70 at the latest.

It’s worth noting that the virus woes weigh on the yield and reject the rate hike calls. However, the ECB policymakers haven’t been hawkish either, which in turn probes the EUR/USD bulls of late.

The Governing Council members generally agreed that the “hump” in inflation will subside next year even as the supply bottlenecks will last longer than initially anticipated, per the latest Minute Statement of the European Central Bank’s (ECB) October meeting. Additionally, Chief Economist Philip Lane reiterated that he expects inflation to fall below target over the medium term.

Moving on, speeches from ECB President Christine Lagarde and policymaker Fabio Panetta will offer intermediate direction but major attention will be paid to the covid updates and yields for clear direction.

Technical analysis

EUR/USD corrective pullback remains below the 61.8% Fibonacci retracement (Fibo.) of March 2020 to January 2021 upside, which in turn suggests the pair’s further declines. In addition to the stated key Fibonacci retracement level around 1.1295, a convergence of the 50% Fibo. and March 2020 high near 1.1500, as well as the 200-week SMA level of 1.1552, also challenge the buyers. On the contrary, lows marked during the late June 2020, surrounding 1.1170, question the sellers before the re-entry.

Additional important levels

Overview
Today last price 1.1223
Today Daily Change 0.0015
Today Daily Change % 0.13%
Today daily open 1.1208
 
Trends
Daily SMA20 1.1429
Daily SMA50 1.155
Daily SMA100 1.1674
Daily SMA200 1.1842
 
Levels
Previous Daily High 1.123
Previous Daily Low 1.1198
Previous Weekly High 1.1464
Previous Weekly Low 1.125
Previous Monthly High 1.1692
Previous Monthly Low 1.1524
Daily Fibonacci 38.2% 1.1218
Daily Fibonacci 61.8% 1.121
Daily Pivot Point S1 1.1194
Daily Pivot Point S2 1.118
Daily Pivot Point S3 1.1162
Daily Pivot Point R1 1.1226
Daily Pivot Point R2 1.1244
Daily Pivot Point R3 1.1258

 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD eases towards 1.1300 as yields pause south-run

EUR/USD is easing towards 1.1300, having faced rejection just shy of 1.1350. The recovery in the risk sentiment pauses the Treasury yields’ south-run, underpinning the US dollar. Fedspeak, US Jobless Claims, Omicron updates in focus ahead of Friday’s US NFP.

EUR/USD News

GBP/USD drops back below 1.3300 as USD rebounds

GBP/USD is trading below 1.3300, paring back gains amid resurgent US dollar demand. The greenback rebounds with yields on Fed’s hawkish view. Concerns over the Omicron covid variant and Brexit issues continue to limit the pair’s upside. US data awaited amid a light UK docket.

GBP/USD News

Gold struggles near one-month low, around $1,770 region

The Fed's hawkish outlook prompted fresh selling around gold on Thursday. A stronger USD offset Omicron fears and further weighed on the commodity. The technical set-up supports prospects for a slide to November swing low.

Gold News

Solana price to provide another buy opportunity before SOL tags $250

A brief technical and on-chain analysis on Solana price. Here, FXStreet's analysts evaluate how SOL could be bound for a brief correction.

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures