Daily Price Outlook
The EUR/USD closed at $1.1283 after hitting a high of $1.1303 and a low of $1.1260. The EUR/USD pair surged for another session on Tuesday amid the US dollar’s weakness as well as the prevailing risk-on market sentiment. The US Dollar Index, which measures the greenback’s value against the basket of six major currencies, fell to 96.34 and weighed on the US dollar, ultimately pushing the currency pair EUR/USD to the upside. Meanwhile, the single currency was also high onboard amid the return of risk appetite in the market.
The fears related to the Omicron variant and its impact on global economic recovery eased on Tuesday after the US Food and Drug Administration decided to authorize the COVID-19 treatment pills by Pfizer and Merk. Both companies have successfully developed pills to cure the coronavirus with Paxlovid from Pfizer and Molunpirvir from Merk, raising optimism in the market that these pills will provide some protection against the deadly Omicron variant.
Furthermore, another famous pharmaceutical company, Moderna, said that its currently available vaccine could provide significant protection against the Omicron variant of coronavirus with a booster shot, as per their laboratory tests. This news added the risk-on market sentiment and pushed the riskier currency pair EUR/USD further to the upside on Tuesday.
At 12:00 GMT, the German GfK Consumer Climate dropped to -6.8 against the projected-2.6, weighed on the Euro, and capitulated further gains in EUR/USD. At 19:57 GMT, consumer confidence in Europe remained flat, with an expectation of -8. From the US side, at 18:30 GMT, the current account from the US showed a deficit of 215B against the forecasted 260B and weighed on the US dollar, which pushed EUR/USD further to the upside.
Meanwhile, the gains in EUR/USD remained limited for Tuesday as the single currency euro was finding it hard to remain higher in the market due to the rising number of coronavirus cases all over Europe. Consumer confidence in Europe’s largest economy, Germany, was also lower in December, keeping the Euro under pressure.
Germany was facing the fifth wave of the coronavirus as the effects of the fourth wave had still not disappeared. The Christmas trade was also disturbed by the restrictions imposed around the country amid the Omicron variant. The Omicron variant could infect or re-infect the vaccinated and recovered COVID-19 people was increasing concern in the market. Evidence also suggested that the Omicron variant was spreading significantly faster than the Delta variant, and this was weighing on the single currency Euro, which kept the EUR/USD gains limited.
EUR/USD Intraday Technical Levels
Daily Technical Levels
Pivot Point: 1.1282
EUR/USD - Technical Outlook
On Wednesday, the EUR/USD is trading at the 1.1268 level, gaining immediate support at the 1.1260 level. The direct currency pair’s immediate resistance stays at 1.1279 level, and the closing of candles below the mark adds a bearish pressure on it. A rise in buying pressure and break above 1.1279 resistance level exposes the pair towards 1.1300 or 1.1325 resistance levels.
Alternatively, the support levels continue to hold at 1.1250 and 1.1235. A bearish breakout increases the chances of a downtrend until the 1.1215 support zone. All the best!
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