EUR/USD looks to break above the 1.1870 region, focus on Lagarde
- EUR/USD stays firm near the 1.1870 level on Tuesday.
- Progress of the pandemic in Europe remains in the centre of the debate.
- ECB’s Christine Lagarde will take centre stage later in the session.
The single currency keeps its upbeat note unchanged so far this week and once again pushes EUR/USD to weekly peaks in the 1.1870 region.
EUR/USD looks to ECB, data, pandemic
EUR/USD extends the upside for the fourth session in a row on turnaround Tuesday and flirts with the topside around 1.1870 despite rising concerns over the unabated pick-up in coronavirus cases in the Old Continent.
In fact, market participants remain optimistic on a “V”-shaped recovery in the region, particularly following recent news on vaccine candidates from Pfizer Inc. (NYSE: PFE) and Moderna Inc. (NASDAQ: MRNA). This is all weighing on the greenback and force the US Dollar Index (DXY) to drop to fresh weekly lows.
Later in the session, ECB’s C.Lagarde will participate in an online Q&A session during the Bloomberg New Economy Forum. Still around the ECB, members E. Fernandez-Bollo, K. af Jochnick and L. De Guindos are all due to speak later in the session.
Across the pond, Retail Sales will be the salient event followed by Industrial/Manufacturing Production, Capacity Utilization, Business Inventories, TIC Flows and the NAHB Index.
In addition, FOMC’s R.Bostic, M.Daly and J.Williams will also speak later on Tuesday.
What to look for around EUR
EUR/USD is once again putting the key resistance in the 1.1870 region to the test amidst a favourable context in the risk appetite trends. In the very near-term, however, EUR/USD is expected to remain under scrutiny on dollar dynamics mainly coming from the US post-elections scenario and the progress of the coronavirus pandemic. On the more domestic front, the euro appears propped up by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), although the now more dovish stance from the ECB prompts some caution when comes to bullish attempts. As usual, the euro still looks supported by the solid position of the EMU’s current account.
EUR/USD levels to watch
At the moment, the pair is gaining 0.15% at 1.1866 and a break above 1.1920 (monthly high Nov.9) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1). On the other hand, the next support emerges at 1.1745 (weekly low Nov.11) followed by 1.1709 (Fibo level of the 2017-2018 rally) and finally 1.1602 (monthly low Nov.4).