- EUR/USD gained on Monday but lacked momentum for further upside.
- Risk-on mood pulling down the US dollar, helping the EUR/USD.
- German data key for further action.
EUR/USD gained on Friday after the dollar came under pressure on the start of a new trading week. The news of a potential vaccine and treatment for the highly contagious coronavirus lifted the global risk sentiments. The upbeat mood helped the pair as the US dollar appeal as a haven-linked currency was not in demand.
A report by the Financial Times that the US administration is actively considering the fast approval for an experimental coronavirus vaccine – developed by the AstraZeneca and Oxford University before the November presidential elections helped the market bulls. Also, the US Food and Drug Administration announced that it allowed the emergency use of blood plasma from recovered patients to treat some patients suffering from the COVID-19 virus.
Fed Chair Jerome Powell will speak at the Jackson Hole symposium later this week, and this has checked the enthusiasm among both the bulls and the bears. Hence, USD weakness was only to a limited extend in intraday action, which was also helped by a bounce in the US Treasury yields – both resulting in an intraday pullback of 65 pips. The EUR/USD settled, little changed for the day, below 1.1800.
The US-China phase one trade deal is now in a better wicket confirmed by the US Trade Representative’s Office statement that both countries saw progress made on resolving issues regarding the agreement. The advancement in the talks helped EUR/USD to attract bids during the Asian session today. The pair is still confined well inside last week’s trading range, despite the volatile moves in the previous 24-hours.
Investors and traders look forward to the release of the final German GDP print for the second quarter of 2020 and German Ifo sentiment survey. The pair will lose on a softer reading as the Eurozone economic recovery pace will be under question; EUR/USD has been in a corrective slide from two-year highs. In the US session, the release of the Conference Board’s US Consumer Confidence Index might gain some attention.