- EUR/USD keeps the daily range with gains capped near 1.1820.
- EMU’s Industrial Production contracted 0.4% MoM in September.
- Lagarde, Powell, Bailey will participate in a discussion panel.
The single currency sticks to the daily gains and takes EUR/USD to the 1.18 neighbourhood on Thursday.
EUR/USD now looks to ECB event
EUR/USD so far manages well to reverse the weekly leg lower after Monday’s rejection from 2-month peaks past the 1.19 yardstick.
The greenback is losing some upside momentum in the second half of the week amidst renewed concerns over the increase of coronavirus infected cases and hospitalizations across the world, while optimism post-Pfizer’s news keeps fading away.
The euro regains the smile in the second half of the week despite recent dovish comments from Lagarde and other ECB members, all hinting at the idea that further stimulus are well on the table and that risks remain tilted to the downside.
In the euro docket, Industrial Production in the broader euro area contracted 0.4% from month earlier in November, adding to the idea that the region faces a double-dip recession scenario.
Later in the European evening, President Lagarde will participate in a discussion panel with Chief Powell and Governor Bailey under the ECB Forum on Central Banking (formerly, the Sintra Forum).
What to look for around EUR
EUR/USD sticks to the consolidative mood in the lower bound of the recent range following Monday’s bearish “outside day”. In the very near-term, EUR/USD is expected to remain under scrutiny on dollar dynamics mainly coming from the US post-elections scenario and the progress of the coronavirus pandemic. On the more domestic front, the euro appears propped up by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), although the now more dovish stance from the ECB prompts some caution when comes to bullish attempts. As usual, the euro still looks supported by the solid position of the EMU’s current account.
EUR/USD levels to watch
At the moment, the pair is gaining 0.11% at 1.1790 and a break above 1.1920 (monthly high Nov.9) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1). On the other hand, the next support emerges at 1.1709 (Fibo level of the 2017-2018 rally) followed by 1.1700 (100-day SMA) and finally 1.1602 (monthly low Nov.4).
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