- EUR/USD gained traction for the fourth straight session on Wednesday amid sustained USD weakness.
- The prevalent risk-on environment weighed heavily on the safe-haven USD and remained supportive.
- The strong intraday positive move took along some short-term trading stops near the 1.1410-15 area.
The USD selling picked up pace during the early European session and lifted the EUR/USD pair closer to mid-1.1400s – highest since March 10.
The pair prolonged its recent positive momentum and gained strong follow-through traction for the fourth consecutive session on Wednesday. The upbeat market mood continued denting the US dollar’s relative safe-haven status and was seen as one of the key factors driving the EUR/USD pair higher.
The optimism over a vaccine for the highly contagious disease overshadowed concerns about a surge in COVID-19 cases across the world. The global risk sentiment was further supported by receding fears about deflationary pressures stemming from the economic downturn led by coronavirus-induced lockdowns.
On the other hand, the shared currency benefitted from hopes that European Union leaders may agree on stimulus and deepen fiscal integration to shield the Eurozone economy from the pandemic. The EUR/USD pair surged to over four-month tops and took along some trading tops near the 1.1410-15 region.
It will now be interesting to see if bulls maintain their dominant position or opt to take some profits off the table ahead of the ECB policy decision on Thursday. In the meantime, the US economic docket – featuring the release of Empire State Manufacturing Index and Industrial Production data – will be looked upon for some short-term trading opportunities later this Wednesday.
Technical levels to watch
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