The Euro is Trading higher against the US Dollar on Tuesday, making a solid test of the 1.20 mark after rallying over a percent at the time of writing. The EURUSD has now set a new three months high with momentum continuing to favor the common currency.
Vaccine hopes have been driving up riskier assets overall as well as keeping the safe-haven US Dollar under pressure. Since Pfizer and BioNTech reported successful phase 3 immunization trials on November 9th, markets have been focused on the speed at which regulators can approve the first injections for the general public. Some analysts are expecting a confirmation as early as this week, stirring even further optimism in the market.
Meanwhile, news of monetary stimulus from both the US and the EU seems to be having opposite effects on the underlying currencies. Policy experts have pointed out that the European Central Bank‘s approach has been to encourage countries to spend more while the US Fed’s strategy has been to print more dollars. The latter is having the effect of pressuring the greenback due to inflation concerns, in turn benefiting the Euro.
From a technical perspective, the EURUSD now has a large gap to fill without much resistANCe before the 1.22 mark. The critical point for Euro bulls will be whether or not the pair dips back below the 1.20 in the coming session, which could cause buyers to back out from making a push higher.
If there is no sustained buying pressure to keep the EURUSD above the 1.20 mark, the likely scenario will be a consolidation between the 1.19 and 1.20 levels as Traders will wait for a stronger signal to drive the pair in either direction. The immediate support past the 1.20 level will be the 1.96 handles around the 0.382 Fibonacci retracements from the 2018 swing low point.
(Chart Source: Tradingview 01.12.2020)
Looking ahead, the EURUSD will remain highly sensitive to vaccine news as well as developments in the fiscal stimulus package expected this month. Traders will also be expecting to hear progress in the EU-UK Brexit trade negotiations which are entering their final stretch, the lack thereof would have markets bracing for a potential no-deal outcome at the end of the month.
Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.
本文标题：Daily Market Recap - EURUSD Breaks Above 1.20
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