- EUR/USD sidelined after rejection at the bearish 5-day simple moving average.
- Asian stocks rise, but the risk-on fails to put a bid under the pair.
- Coronavirus concerns and dovish ECB expectations weigh on the euro.
EUR/USD struggles to draw bids despite improved risk appetite in the financial markets.
The pair is currently trading largely unchanged on the day near 1.1707, having faced rejection at the descending or bearish 5-day simple moving average (SMA) resistance at 1.1725 during the Asian trading hours.
Risk recovery
Major Asian indices like Japan’s Nikkei and Australia’s S&P/ASX 200 are flashing green alongside 0.5% gains in the S&P 500 futures. Stocks are seemingly drawing bids on expectations for additional US fiscal stimulus before the Nov. 3 Presidential Elections.
Further, news that drugmaker Pfizer Inc could have a coronavirus vaccine ready in the United States by the end of this year looks to be powering gains in stocks.
Usually, stock market gains weigh over the greenback. However, this time, the risk-on isn’t helping EUR/USD.
That’s possibly due to rising economic uncertainty across the Eurozone, courtesy of the second wave of the coronavirus. Italy’s cases swelled to a daily record on Sunday while the government prepared for new containment measures. Meanwhile, the US had a fifth consecutive day of infections over 50,000.
Besides, markets are pricing more ECB stimulus, as indicated by the US-German yield differential’s recent widening.
Looking ahead, the pair may take cues from the German Bundesbank’s monthly economic report and the ECB President Lagarde’s speech, due during the European trading hours. During the North American trading hours, the focus will be on the Federal Reserve Chairman Powell’s speech.
Technical levels
Share
