EUR/USD edges higher after Monday's Doji as risk assets in Asia rally

EUR/USD opened at 1.0895 in Asia and moved higher, tracking the uptick in the US stock futures.
The improved risk appetite weighed over the safe-haven US dollar.
Optimism about a potential coronavirus vaccine built is likely powering gains in risky assets.
An above-forecast German Consumer Confidence may bolster the bullish tone around the EUR.

Omkar Godbole FXStreet Contributor

EUR/USD is marching higher on Tuesday amid the rally in the Asian risk assets. The uptick marks a positive follow-through to the indecision signaled by Monday's Doji candle.

Risk-on weighs over USD

The Asian stock markets are flashing green at press time with the Nikkei index leading the pack with over 2.3% gains. Meanwhile, the futures tied to the Dow Jones Industrial Average are up over 300 points and the growth-linked currencies like the Australian dollar are gaining altitude.

The risk-on could be associated with the optimism about a potential coronavirus vaccine. American biotech company Novavax said Monday that it started the first human study of its experimental coronavirus vaccine. The initial results on safety and immune are expected in July, the company said, according to CNBC.

The improved risk appetite looks to be weighing over the US dollar, a global reserve currency, which has become a preferred safe haven amid the coronavirus pandemic.

Focus on German Gfk

The upward move in EUR/USD may gather pace if the German Gfk Consumer Confidence Survey (June) betters market expectations by a big margin, boosting speculation of a faster-than-expected economic recovery in the Eurozone's largest economy.

The forward-looking metric is forecasted to rise to -18.9 from May's reading of -23.4. The data is scheduled for release at 06:00 GMT. The IFO Business Expectations Index rose to 80.1 in May, beating the forecast for a rise to 75.00 from April's 69.4 by a notable margin, the data released on Monday showed.

Technical levels

Acceptance above 1.0914 (the high of Monday's Doji candle) would mean the pullback from the May 21 high of 1.1008 has ended and the uptrend from the May 14 low of 1.0775 has resumed. That said, the overall bias will remain neutral while the pair is held within the multi-week trading range of 1.1019 to 1.0727.

A move below the low of the Doji candle at 1.0870 would shift risk in favor of a drop to the lower end of the trading range.

1. R3 1.0961
2. R2 1.0938
3. R1 1.0917
PP 1.0894
1. S1 1.0873
2. S2 1.085
3. S3 1.0829

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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