- The EUR / USD recovery attempt loses steam below 1.1840.
- The euro cuts losses and the USD retreats as risk aversion declines.
- EUR / USD: It remains neutral in the short term while below 1.1870.
The euro cut losses at the beginning of the US session on Tuesday, after trading lower in the European session, falling to session lows at 1.1795. The pair, however, seems unable to extend the recovery above 1.1840.
Concerns over COVID-19 resurgence in Europe hurt euro
The common currency appreciates around 0.2% on the day, regaining about half of the ground lost on Monday. The risk-off sentiment observed at the weekly open was reflected in sharp declines in equity markets and a strong US dollar.
The EUR / USD pair fell again in the European session on Tuesday, with investors still wary that the rising number of coronavirus infections in Europe could derail the embryonic economic recovery. Beyond that, the uncertainty about the outcome of the US presidential election has further favored safe assets, to the detriment of the euro.
Market sentiment appears to have improved somewhat during the North American session with US macroeconomic data helping to ease fears. Durable goods orders and better-than-expected US house prices have lifted the mood, sending the safe-haven dollar lower, helping the euro to rebound.
EUR / USD: Needs to exceed 1.1870 to gain momentum
On a technical level, EUR / USD remains neutral in the short term, according to Valeria Bednarik, FXStreet chief analyst: “The short-term outlook is neutral, based on the 4-hour chart, as the EUR / USD pair remains unable to break above a slightly bearish 20 SMA, now struggling to break above it. The longer moving averages remain below the current level, with limited directional strength. Technical indicators, meanwhile, are glued to their midlines. ”
Credits: Forex Street

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