- Some renewed USD weakness assisted EUR/USD to regain traction on Monday.
- The upside seems limited ahead of Powell’s speech during Jackson Hole Symposium.
The EUR/USD pair added to its intraday gains and climbed to fresh daily tops, around mid-1.1800s during the mid-European session.
The emergence of some fresh selling around the US dollar assisted the pair to regain positive traction on the first day of the week and recover a major part of the previous session’s losses. Lawmakers in the US have been struggling to reach consensus over additional stimulus measures.
This coupled with growing concerns about the US economic recovery exerted some fresh downward pressure on the greenback. Apart from this, the risk-on mood, amid the optimism over the US authorization of a new coronavirus treatment, further undermined the USD’s safe-haven status.
It is worth recalling that the US Food and Drugs Administrations on Sunday said that it had issued ‘emergency use approval’ for the use of blood plasma from recovered patients as a treatment option for certain patients suffering from the effects of the highly contagious coronavirus.
On the other hand, the shared currency was underpinned by the fact that the European governments have taken decisive action to support economic growth. The pair has now moved back closer to mid-1.1800s, a resistance marked by 200-hour SMA, albeit the upside is likely to remain limited.
Investors might refrain from placing aggressive bets ahead of the Fed Chair Jerome Powell’s speech during the Jackson Hole Symposium later this week. Powell’s remarks will be closely scrutinized for clues about the future monetary policy before positioning for the near-term trajectory.
Hence, any subsequent positive move could meet with some fresh supply at higher levels amid absent relevant market moving economic releases. This makes it prudent to wait for some strong follow-through buying before positioning for any further intraday appreciating move.
Technical levels to watch
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