On Tuesday, the EUR/USD gained additional momentum and broke over the 1.1300 resistance level in a rather convincing manner.
If the rebound continues to gain momentum, the pair is expected to touch 1.1374 (November 18) before reaching the minor stumbling block at the 20-day simple moving average (SMA) at 1.1389.
Continued declines in the EUR/USD are likely as long as the pair moves underneath the 2-month resistance level (which corresponds to the top reached in September) near 1.1560.
In the long term, it is projected that the offered position in the spot will remain below the 200-day simple moving average (SMA) at 1.1828.
Technical Analysis Of The EUR/USD
EUR/USD CHART Source: Tradingview.com
The EUR/USD duo is trading near the previously noted high, a few points underneath the 38.2% retrace of the November collapse at 1.1378, which is also near the previous high.
The near-term outlook suggests that the pair will continue to rise, especially if it finally breaks over the previously indicated Fibonacci barrier level.
A look at the 4-hour chart reveals that it is now fighting near a bearish 100 SMA, whereas the 20 SMA retains a bullish gradient underneath the current price level.
Chart patterns have achieved overbought levels, allowing the stock to hang onto its intraday gains while also indicating a high level of purchasing demand.
Review Of The Fundamentals
The currency sector was taken over by risk aversion, which was to the harm of the Dollar. The EUR/USD pair surged higher and reached a high of 1.1372 as fears over the Omicron coronavirus type grew more widespread.
Moderna’s CEO stated that he believes the vaccine’s efficiency will most likely decrease as a result of the new variant, though he did not specify by what percentage.
Additionally, and according to initial estimations, antibody medication cocktail combinations appear to be less efficient versus this new strain of the virus.
Countries across Europe are continuing to make frantic efforts to keep the virus from spreading further. Greece has declared vaccination compulsory for anyone over the age of 60, and border restrictions are taking place all around the world at present.
Although it is now unclear what the degree of the repercussions on economic growth will be, this new circumstance is intended to delay the start of the recovery process.
The desire for safety has reduced government bond yields to their lowest levels in nearly a month, with the return on the 10-year Treasury note falling to 1.419%, the lowest level in nearly a month.
Per the preliminary projections, EU inflation climbed to a historic high of 4.9% year-on-year in November, further stoking the flames of unrest.
The core figure came in at 2.6%, which is significantly higher than the prior reading of 2%, putting increasing strain on the European Central Bank to begin reducing facilities.
According to the US economic schedule, the Chicago Purchasing Managers’ Measure for November and US Federal Reserve President Jerome Powell’s hearing on the CARES Act in front of the Senate Banking Committee are both scheduled to take place.
The text of Powell’s speech has already been made public, and it indicates that the factors driving inflation upward are projected to persist “far into next year,” according to the transcript.
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