- EUR/USD technical pattern points to losing bullish momentum at resistance level 1.1880
- The shift in risk sentiment tone among foreign investors is the only market theme that fuels the upside
The recent rally that the EUR to USD pair has experienced is at risk of reversal amid a lack of clear conviction among the bulls to bid the pair past the 1.1870 – 1.1880 resistance band. The EUR/USD can now enter a consolidation phase as sellers continue to lurk near the Monday’s opening price at 1.1838. If the EUR/USD sellers can manage to defend last week’s high of 1.1916, we can be in the stage of developing a short-term topping pattern.
Elsewhere, the coronavirus second wave outbreak continues to keep the market on its toes. The only improvement in market sentiment comes from the global economy which is expected to continue to recover but at a moderate pace.
Meanwhile, smart money is keeping an eye on the US political debacle and the fresh round of stimulus measures that might or might not come fruitful.
On the economic data front, investors are bracing for a series of key risk events that have the potential to give more clarity to the price action. On Wednesday, the FOMC minutes will reveal more info on its forward guidance policy adoption. The FOMC is followed by the ECB’s monetary policy accounts on Thursday and the preliminary PMIs data for the US and EU’s economies.
Another market theme worthy of consideration is the resumption of the EU-UK post-Brexit trade negotiations.
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