EUR/USD rebound from 1.1700 loses steam right ahead of 1.1800
- EUR/USD bounces up from 1.1700 and consolidates below 1.1790.
- The euro pares last week's losses in a more optimistic market session.
- Below 1.1840, the EUR/USD remains negative – Rabobank.
The euro-dollar has gone through a solid recovery on Monday fuelled by a brighter market mood, to erase most of last week’s losses. The pair appreciated nearly 0.6% on the day, bouncing up from lows near 1.1700, to consolidate right below 1.1790 during the late US trading session.
The euro pares losses buoyed by market optimism
The common currency has traded firmer on Monday, as brighter market sentiment has weighed on the safe-haven US dollar. Risk appetite has prevailed on Monday, after the US House Speaker, Nancy Pelosi suggested on Sunday that a fiscal stimulus package might be pushed before the Presidential Elections. Beyond that, the pharmaceutical Pfizer has reported that a coronavirus vaccine might be ready in the US before the year-end, which has boosted sentiment further.
In Europe, the ECB President, Christine Lagarde has warned that climate change will have an impact on the currency market. Somewhat earlier, Luis de Guindos, the Vice-president of the ECB had noted that the euro area recovery is losing momentum although the impact on the euro has been limited.\
EUR/USD: Bearish while below 1.1840 – Rabobank
From a technical perspective, the Rabobank FX analysis team sees the euro on a bearish note wile below 1.1840: “From a technical perspective, the price action in EUR/USD has been bearish since September when a break below the key trendline occurred. Technicals also suggest that a strong rebound above this trendline – currently at around 1.1840 – is required to undermine the notion of the wave V below the September 25 low at 1.1612 unfolding in the coming weeks. In our view, fundamentals are also lining up to take EUR/USD towards 1.16 on a three-month view.”
Technical levels to watch