The Dollar’s Weakness Helped the EUR Move Forward
The EUR/USD peaked at 1.1887 as the dollar fell back against all of its major rivals. The market mood was mostly upbeat and buoyed. But news over the weekend reported that Oxford and AstraZeneca are resuming trials on their potential coronavirus vaccine. A slim macroeconomic calendar and top-tier events later this week kept investors cautious, with the significant pairs staying within normal levels.
The EU released industrial production for July, which rose 4.1% in the month, beating expectations. Compared to the previous year, it was up 8.7% better than the 8% expected. This Tuesday, Germany will publish the ZEW Survey for September, with Economic Sentiment seen at 69.8 in the country and 62.8 in the EU, both below previous readings. The United States will publish industrial production and capacity utilization for August.
Technical outlook of EUR/USD pair
The USD regained some strength last week, but the Euro held up relatively well, as the Euro is quite strong, and certainly in a bullish trend in the long term. The Bulls problem is that the price movement here finds it challenging to overcome the large round number and the psychological level of 1.2000. Even though the USD is weakening, and the price is slowly rising, we still have a consolidation between 1.1750 and 1.2000.
Short-term price action is weakly bullish but consolidates slightly longer over the medium term.
EUR/USD is trading at the 1.1860 price zone, bullish for the day. Ahead of the Asian open, the pair has lost the positive momentum seen earlier in the day, but the risk remains skewed to the upside.
The 4-hour chart shows that the price is holding above all of its moving averages. The Momentum indicator has turned lower, while the RSI has stabilized positively, indicating limited selling interest. The 61.8% retracement of its September declines reaches 1.1915, while the pair peaked last week at 1.1917. Gains beyond should favor a bullish extension towards the year high at 1.2011.
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