EUR/USD jumps back on the bids above 1.1800 as US dollar retreats

EUR/USD trades well bid above 1.1800, extending its renewed upside ahead of the European open, as the US dollar retreats across the board despite the  |  27/10/2020 04:22
  • EUR/USD supported above 1.1800 amid US dollar pullback.
  • 10-year Treasury yields drop below the key 0.80% level.
  • Coronavirus updates in Europe to cap the euro’s bounce.
  • US Durable Goods and Consumer Confidence next of note.

EUR/USD trades well bid above 1.1800, extending its renewed upside ahead of the European open, as the US dollar retreats across the board despite the downbeat market mood.

The main currency pair benefits, as the haven demand for the greenback, is on the back foot so far this Tuesday, even though Asian equities flash red.

The US dollar reverses a part of Monday’s surge, mainly dragged down by the weakness in the Treasury yields, especially after the benchmark 10-year Treasury yield dropped below the key 0.80% level.

The overall market sentiment remains weighed down by the rapidly rising coronavirus cases globally, with major European economies contemplating nationwide lockdowns once again, as they struggle to contain the second wave of the virus.

The upside in the euro, therefore, appears elusive amid the negative coronavirus developments in the EU, which enforce dovish ECB expectations. Meanwhile, fading prospects of a US fiscal stimulus could likely put a fresh bid under the US dollar, limiting EUR/USD’s bounce.

On the data front, the focus will be on the US Durable Goods Orders and CB Consumer Confidence amid a light EUR docket. The virus stats globally will be closely followed.

EUR/USD technical levels

Immediate support is placed at 1.1803 (Oct 26 low/ 10-DMA), below which the 20-DMA at 1.1782 would be tested. To the upside, 1.1836 (5-DMA) is the level to beat for the bulls. The next critical resistance awaits at 1.1861 (Oct 26 high).

EUR/USD additional levels

 

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