- EUR / USD retreats from 10-day highs at 1.1860 to around 1.1800
- The euro recovers even more with the rise in equity markets.
The euro is retreating against the US dollar during the North American session, returning to the 1.1800 zone after hitting a two-week high at 1.1860, a ten-day high amid the general weakness of the dollar. At time of writing, the pair is trading above 1.1798, gaining 0.71% on the day.
US dollar sinks as risk appetite rises
Joe Biden’s advantage over Donald Trump in the US presidential election, combined with the chances that Republicans will retain control of the Senate to block any Democratic attempts to introduce stricter regulations or increase taxes on American companies, it has triggered a risk rally on Wall Street that has hit the US dollar as a safe haven.
This favorable scenario has prompted the euro on the rise for the third day in a row, extending its recovery from the lows of the week at 1.1600 to the upper range of 1.1800 before correcting downward in the US trading hours, with the market awaiting the result of the Federal Reserve announcement.
With the United States still awaiting the final outcome of the presidential election, the Fed is expected to adopt a wait-and-see stance. Most likely, the central bank will keep its benchmark interest rate unchanged at the current 0.25% and continue with its commitment to support the economic recovery from the impact of the COVID-19 crisis.
EUR / USD levels
The EUR / USD is trading on a bullish bias despite the loss of momentum. On the upside, immediate resistance awaits at 1.1880, ceiling of last October 21. In case of exceeding this level, a test of 1.1900 would be expected.
In the opposite direction, the 1.1765 area is the first consideration support and also the 20-day moving average. A drop below this would ratify the current medium-term lateral bias.
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Credits: Forex Street
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