- EUR / USD remains firm near the 1.1870 level on Tuesday.
- The advance of the pandemic in Europe remains at the center of the debate.
- Christine Lagarde, President of the ECB, will draw investors’ attention later in the day.
The common currency maintains its optimistic tone unchanged so far this week and once again pushes EUR / USD to new weekly highs in the 1.1870 region.
EUR / USD focuses attention on the ECB, economic data and the pandemic
EUR / USD extends rally for the fourth day in a row on Tuesday and flirts with the region around 1.1870 despite growing concerns about the incessant increase in coronavirus cases in the Old Continent.
In fact, market participants are still optimistic about a V-shaped recovery in the region, particularly after recent news about the Pfizer and Moderna vaccine candidates. All of this weighs on the safe-haven US dollar and forces the DXY US dollar index to fall to new weekly lows.
Later in the day C. Lagarde, President of the ECB, will participate in an online question and answer session during the Bloomberg New Economy Forum. Still at the ECB, members E. Fernandez-Bollo, K. af Jochnick and L. De Guindos are due to speak later in the session.
Across the Atlantic, retail sales data will be the featured event, followed by the release of data for industrial / manufacturing production, capacity utilization, business inventories, ICT flows and the NAHB index.
Additionally, R.Bostic, M.Daly and J.Williams from the FOMC will also speak later on Tuesday.
What can we expect around the EUR?
EUR / USD is once again testing key resistance at the 1.1870 region amid a favorable environment for risk appetite. However, in the very near term, the EUR / USD pair is expected to remain under pressure from the dynamics of the dollar mainly coming from the post-election scenario in the US and the progress of the pandemic. On the more domestic front, the euro seems supported by upbeat results from the region’s fundamentals (despite the fact that momentum seems somewhat mitigated in several regions), although the now more pessimistic stance of the ECB suggests some caution in the bullish attempts of the pair. As usual, the euro still appears underpinned by the strong current account position of the eurozone.
EUR / USD levels
At the time of writing, the EUR / USD pair is gaining 0.15% on the day, trading at 1.1866. A break above 1.1920 (November 9 high) would target 1.1965 (August 18 high) on the way to 1.2011 (September 1 high). On the other hand, the next 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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