EUR/USD regains upside traction as Asian stocks hit record high
- EUR/USD rises as the dollar drops with resilient risk sentiment.
- Asian stocks reach new record highs on stimulus hopes.
- The US stock market positioning looks overstreched, according to Goldman Sachs.
Having defended 1.21 during the early Wednesday, EUR/USD now gains altitude alongside fresh record highs in the Asian stocks.
Jumps 20 pips
EUR/USD has added 20 pips to trade above 1.2120. Sellers have consistently failed to establish a foothold below 1.21 this week even though the European Central Bank is expected to announce more stimulus this Thursday.
The latest move higher is likely the result of dollar weakness fueled by the risk-on action in the Asian equities and the futures tied to the S&P 500.
According to Reuters, MSCI's broadest index of Asia-Pacific shares outside reached a new all-time peak of 646.10 early today and is currently trading 0.5% higher on the day. The S&P 500 futures are up 0.3%. Risk assets are reportedly drawing bids in hopes that the US Congress will soon agree on a new stimulus package.
Readers should note that the bullish positioning in the US stock market looks overstretched. As such, a sudden pullback cannot be ruled out, in which case, the dollar would pick up a bid, pushing EUR/USD lower.
The Eurozone and the US data calendar is light on Wednesday, leaving the pair at the mercy of the broader market sentiment.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
