- Summary:
- The EURUSD pair is up for the past five straight days as investors react to the ECB decision, coronavirus vaccine, upcoming Fed decision and positive data from Europe.
The EURUSD pair is up for the fifth consecutive day as traders continue reacting to the relatively hawkish statement by the European Central Bank (ECB). The pair is trading at 1.1895, which is the highest it has been since September 10.
The euro has remained relatively resilient since the latest ECB decision last week. In this decision, the bank left interest rates and the quantitative easing program unchanged. Still, investors reacted to the overall hawkishness of the statement and Christine Lagarde’s press conference. In it, she said that while the bank was concerned about the stronger euro, it had no immediate plans to curtail this strength.
The EURUSD has also gained because of the overall strong data from the European Union. In a report yesterday, the Eurostat said that the bloc’s industrial production increased by 4.1% in July, boosted by industries that were opening after the lockdown. This growth was seen in all European Union members, with Italy and Spain recording the fastest growth.
Third, the EURUSD is rising because of the rising possibility of a coronavirus vaccine being revealed soon. In a statement on Sunday, Pfizer’s CEO said that the company was confident that its vaccine will go into effect by the end of the year. Similarly, AstraZeneca restarted the clinical trial of its vaccine. A vaccine tends to be negative for the US dollar because it eliminates global risks. As you recall, the dollar index rose to a multi-year high at the peak of the coronavirus fears.
Finally, the EURUSD is gaining as traders focus on the upcoming FOMC meeting. Analysts expect the Fed to leave interest rates unchanged and possibly plead for more fiscal help.
EURUSD technical outlook
The EURUSD pair is trading at 1.1895. On the daily chart, we see that the pair started to rebound after reaching a low of 1.1743. This was an important price because it was along the lower line of the blue ascending channel. The price is also above the 25-day and 50-day exponential moving averages while the RSI has started moving upwards.
Therefore, I suspect that the pair will continue rising as bulls aim for the next resistance level at 1.2000. That price is along the upper side of the ascending channel. On the flip side, a move below the lower support level will invalidate this trend.
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EURUSD technical outlook
