EUR/USD stays pressured towards 1.1750 on covid woes ahead of key events


  • EUR/USD probes five-day downtrend near three-month low, off intraday bottom.
  • Delta covid variant back easy money supporters, US policymakers “not that far apart” ahead of infrastructure spending procedural vote.
  • DXY shrugs off Treasury yields to stay firmer around April tops.
  • ECB may struggle to justify hawkish tilt on Thursday.

EUR/USD fades bounce off intraday low, down 0.06% on a day around 1.1770, heading into Wednesday’s European session. The major currency pair refreshed a three-month low the previous day before bouncing off 1.1755.

While the recovery moves tracked Wall Street gains, mainly due to earnings optimism and hopes of further stimulus, the pair bears keep reins as the coronavirus woes intensify. Also likely challenging the EUR/USD traders could be the cautious sentiment ahead of today’s procedural voting on US President Joe Biden’s infrastructure spending bill and Thursday’s European Central Bank (ECB) meeting.

Australia’s covid conditions turn grim as the infections jump in key states like New South Wales and Victoria. On the other hand, UK’s covid cased jumped 41% between July 14 and July 20, per Reuters, whereas Kyodo News reports Tokyo’s daily covid count jumping back above 1,000 after easing the previous day.

Amid these plays, World Health Organisation (WHO) head Tedros Adhanom Ghebreyesus said, per Reuters, “The world's leading economies could bring the covid-19 pandemic under control in months.” The WHO Boss also added, “We are in the early stages of another wave of infections.”

Elsewhere, comments from US Deputy Secretary of State Wendy Sherman also weigh on the market sentiment as the diplomat flashes concerns over North Korea and China during the trilateral meet in Tokyo.

It should also be noted that the coronavirus variant fears challenge the economic recovery from the pandemic’s earlier wave and hence push the policymakers to keep the easy money flowing, which in turn backs the optimists.

Against this backdrop, US 10-year Treasury yields fade bounce off February lows but the US Dollar Index (DXY) remains firm for the fifth consecutive day near April’s top.

Looking forward, a light calendar keeps risk catalysts on the driver’s seat. Hence, any positive news from the US Senate could detail EUR/USD bearish momentum ahead of tomorrow’s ECB.

Technical analysis

EUR/USD remains pressured inside a monthly falling wedge bullish chart pattern, between 1.1825 and 1.1735, but the quote’s latest bounce off multi-day low, backed by a short-term support line and recovering Momentum signal intermediate bounces.

Additional important levels

Overview
Today last price 1.1774
Today Daily Change -0.0007
Today Daily Change % -0.06%
Today daily open 1.1781
 
Trends
Daily SMA20 1.1853
Daily SMA50 1.202
Daily SMA100 1.1985
Daily SMA200 1.2006
 
Levels
Previous Daily High 1.1803
Previous Daily Low 1.1756
Previous Weekly High 1.188
Previous Weekly Low 1.1772
Previous Monthly High 1.2254
Previous Monthly Low 1.1845
Daily Fibonacci 38.2% 1.1774
Daily Fibonacci 61.8% 1.1785
Daily Pivot Point S1 1.1757
Daily Pivot Point S2 1.1733
Daily Pivot Point S3 1.1709
Daily Pivot Point R1 1.1804
Daily Pivot Point R2 1.1827
Daily Pivot Point R3 1.1851

 

 

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