- EUR / USD reversed an intraday slide to the 1.2200 level and rose again closer to multi-year highs.
- A modest rebound in equity markets provided some support and helped limit the initial decline.
- COVID-19 jitters, stronger US GDP figures propped up the USD and limited gains for the pair.
The pair EUR/USD it updated the daily highs, around the 1.2255-60 area in the last hour, although it quickly retreated a few pips thereafter. The pair was last seen trading in the 1.2235 region and had a rather subdued reaction to US macroeconomic data.
The pair managed to attract some buying on the dips near 1.2200 and moved near the more than two and a half year highs set last Thursday. The intraday rebound was solely sponsored by a modest pullback in the US dollar from daily highs, although it lacked a strong following.
The passage of a long-awaited US stimulus package helped offset concerns over the discovery of a new strain of coronavirus and the imposition of strict travel restrictions / closures in the UK. This was evident by a positive rally in equity markets, which did not help the US dollar to preserve its intraday gains.
That said, the underlying cautious mood continued to lend some support to the dollar’s safe-haven status and kept any further gains for the EUR / USD at bay. The USD was supported by the final US GDP printout, which showed the economy expanding at an annualized rate of 33.4% in the third quarter compared to an estimated 33.1%.
Tuesday’s US economic schedule also includes the release of the Richmond Manufacturing Index, the Conference Board Consumer Confidence Index and existing home sales. The data, along with developments surrounding the coronavirus saga, will influence USD price dynamics and produce some short-term trading opportunities around the EUR / USD pair.
Technical levels
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