EUR / USD holds firm, finds resistance around 1.1870

After hitting previous multi-week highs around 1.1870, the EUR/USD has encountered some selling pressure and is falling back to the 1.1850 zone in the wake of the Wall Street opening bell on Wednesday.

EUR / USD remains vigilant for stimulus headlines

EUR / USD posted gains for the fourth consecutive session on Wednesday against the backdrop of the dollar’s continuing downtrend.

Indeed, the dollar is facing increasing selling pressure as the upcoming meeting between S.Mnuchin and N.Pelosi (sometime later on Wednesday) has rekindled hopes for further fiscal stimulus.

There is no data coming from the euro zone, while the ECB’s Luis De Guindos said earlier in the session that an early removal of the current stimulus has the potential to damage the incipient recovery in the region, while warning against derivative financial risks. of mounting debt.

Previous comments from the FOMC’s L. Brainard also did not help the dollar after he suggested that inflation is forecast to remain low for years to come, while the US recovery looks highly uncertain and uneven.

Later Wednesday, De Guindos will speak again and board member Phillip Lane will participate in an online panel discussion.

What to look for around EUR

EUR / USD extends the bounce from last week’s lows at the 1.1690 / 85 band and is already trading multi-week highs well above 1.1800. The outlook on EUR / USD remains constructive and bearish moves are seen as only corrective. Furthermore, the positive bias of the euro continues to be underpinned by the favorable performance of domestic fundamentals (despite the fact that momentum appears somewhat mitigated in several regions), the ECB’s so far cautious attitude and the strong position of the EMU current account. . Furthermore, the likely “blue wave” after the US elections is seen as a negative driver for the dollar and has the potential to lend the pair additional wings in the long term.

Technical levels

At the moment, the pair is gaining 0.31% at 1.1858 and a breakout of 1.1862 (October 21 monthly high) would target 1.1917 (September 10 high) en route to 1.1965 (August 18 monthly high). On the other hand, the next support is located at 1.1688 (monthly minimum of October 15) followed by 1.1612 (monthly minimum of September 25) and finally 1.1495 (monthly maximum of March 9).

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Credits: Forex Street

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