Market news
08.12.2021, 13:08

EUR/USD sticks to gains near daily high, bulls await a sustained move beyond 1.1300

  • The risk-on mood undermined the safe-haven USD and assisted EUR/USD to gain traction.
  • The euro further benefitted from some cross-driven strength stemming from EUR/GBP.
  • The lack of any strong follow-through buying warrants some caution for bullish traders.

The EUR/USD pair held on to its modest intraday gains heading into the North American session, with bulls now awaiting a sustained move beyond the 1.1300 round-figure mark.

The pair managed to regain some positive traction on Wednesday and built on the previous day's late rebound from a one-and-half-week low, around the 1.1230-25 region. An extension of the recent rally in the equity markets undermined the safe-haven US dollar and extended some support to the EUR/USD pair.

The global risk sentiment remained well supported by easing fears about the potential economic fallout from the new Omicron variant of the coronavirus. The upbeat market mood got an additional boost after Pfizer said the third dose of their COVID-19 vaccine neutralized the Omicron variant in lab tests.

The shared currency further benefitted from some cross-driven strength stemming from a sharp spike in the EUR/GBP cross, triggered by reports about the imposition of fresh COVID-19 restrictions in the UK. That said, hawkish Fed expectations helped limit the USD losses and capped gains for the EUR/USD pair.

Investors seem convinced that the Fed would tighten its monetary policy sooner rather than later to contain stubbornly high inflation. In fact, the money markets have been pricing in the possibility of an eventual liftoff in May 2022, which should continue to act as a tailwind for the greenback.

The focus now shifts to Friday's release of the US consumer inflation figures, which would influence the Fed's decision to taper its stimulus at a faster pace and set the stage for an interest rate hike. This will drive the USD demand and provide a fresh directional impetus to the EUR/USD pair.

This makes it prudent to wait for a sustained strength beyond the 1.1300 mark before placing fresh bullish bets around the EUR/USD pair. In the absence of any relevant market-moving economic releases, developments surrounding the coronavirus saga will be looked upon for some trading opportunities.

Technical levels to watch

 

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location