- The USD’s renewed sell bias helped EUR / USD regain positive traction on Tuesday.
- The rally lost stability at 1.1900.
The pair EUR/USD It fell back around 40 pips from the daily swing highs and was last seen trading modest daily gains, just above 1.1850.
Following volatile swings overnight, the pair managed to regain positive traction on Tuesday and was supported by the emergence of some new selling around the US dollar. The formal go-ahead for US President-elect Joe Biden to begin his transition to the White House cleared up uncertainty on the American political front. This, along with optimism about a possible COVID-19 vaccine, continued to support the bullish market mood and weighed on the dollar’s relative safe-haven status.
The shared currency received a further boost from Tuesday’s better-than-expected German GDP growth figures for the third quarter of 2020, which showed the economy expanding 8.5% quarter-on-quarter compared to the 8.2% previously estimated. On the other hand, the German IFO business climate index was in line with consensus estimates and fell to 90.7 in November from 92.5 previously. The negative reading, to some extent, was offset by the Current Rating Index, which dropped to 90 during the reported month compared to 87.2 expected.
Despite the support factors, the EUR / USD struggled to capitalize on its positive intraday move and once again started to pull back from 1.1900. However, the pullback lacked an obvious fundamental catalyst and is likely to remain limited. Increasing bets on additional monetary easing by the Fed in December could prevent dollar bulls from making aggressive bets. Therefore, the key focus will remain on Wednesday’s release of the Minutes from the last FOMC monetary policy meeting.
Meanwhile, Tuesday’s US economic agenda, featuring the Conference Board’s Consumer Confidence Index and Richmond Manufacturing Index releases, will be considered for some short-term business opportunities.
Technical levels
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