- EUR / USD regains lost ground on Friday and returns to the 1.1870 region.
- Positive news about a coronavirus vaccine increases investors’ appetite for risk.
- Preliminary PMI manufacturing indices for the eurozone and Germany surprised to the upside.
The common currency starts the week with a positive tone and pushes the pair EUR/USD back to him upper end of recent range near 1.1870.
EUR / USD is still capped below 1.1900
EUR / USD recovers from Friday’s dip and advances to the 1.1870 / 80 region at the beginning of the week, always sustained by improved risk appetite, particularly in response to news about the development of a vaccine from biopharmaceutical company AstraZeneca.
Further, weakness around the dollar offers additional support to the pair, as investors continue to look beyond the pandemic and anticipate a strong recovery in the global economy.
Regarding the economic data of the euro zone, the preliminary index Markit’s manufacturing PMI beat estimates in Germany (57.9) and the euro zone as a whole (53.6) for the current month, while it came in below expectations in France (49.1). Still in the region, the ECB’s I. Schnabel will speak later in the day.
On the other side of the Atlantic, Markit will also release its preliminary PMIs, followed by the release of the Chicago Fed index and the FOMC’s Daly and Evans speeches.
What can we expect around the EUR?
EUR / USD was unable to retest, let alone exceed, the 1.1900 level despite the favorable context over the past week. However, in the very short term, the EUR / USD is expected to remain under pressure due to the impact of the pandemic on the region’s economy and the political developments around the EU Recovery Fund. Furthermore, the ECB’s dovish stance and possible additional stimulus announcements in December are also helping to limit the pair’s rise.
EUR / USD levels
At the time of writing, the EUR / USD pair is gaining 0.22% on the day, trading at 1.1881. A break above 1.1920 (Nov 9 high) would target 1.1965 (Aug 18 high) on the way to 1.2011 (Sept 1 high). On the other hand, immediate support is at 1.1745 (November 11 low), followed by 1.1709 (Fibonacci level of the 2017-2018 movement) and finally 1.1602 (November 4 low).
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