- EUR/USD begins the week with an uptick to refresh highest levels since February 26, wobbles around the top of late.
- EU battles for more vaccines as jab jitters disappoint the bloc members, Brexit, sluggish data add to the fears.
- DXY marked the biggest daily losses in six months after NFP debacle.
- Qualitative factors will be the key amid a light calendar.
Having recently refreshed the multi-day top, followed by a pullback to 1.2161, EUR/USD stays firmer around 1.2175, up 0.05% intraday, during Monday’s Asian session. In doing so, the currency major pair refreshes a 10-week high as the weekend news concerning the coronavirus (COVID-19) vaccine deal by the European Union (EU) propels Friday’s rally due to the NFP shock.
European Commission (EC) President Ursula von der Leyen announced on Saturday that the EU has struck a deal with BioNTech/Pfizer for up to 1.8 billion extra doses of their Covid-19 vaccine. Late last week, the bloc leader also mentioned to jab 30 Europeans every second. The old continent has been criticized for a slow start to the vaccinations and jab jitters with the UK.
Hence, the latest vaccine deal with one of the vaccine leaders can help the EUR bulls to stretch Friday’s strength, backed by the downbeat US employment figures for April. Not only the headline Nonfarm Payrolls that dropped to 266K versus a million expected but the Unemployment Rate also jumped from 5.8% market consensus to 6.1% for the said month.
Despite being a strong disappointment to the US job watchers, global equities and commodities rallied after the news. The reason could be traced to the US Federal Reserve (Fed) as the downbeat American employment data defends the Fed’s easy money policies that have been under attack of late.
While the US data and EU’s vaccine deal back the mild risk-on mood, Brexit jitters and Brussels’ failures to flash strong economic figures like the US and UK, obviously before Friday, probe the risk appetite.
Against this backdrop, S&P 500 Futures print 0.11% intraday gains by the press time.
Looking forward, a lack of major data/events to kick-start the week may keep challenging the EUR/USD bulls. However, sellers are less likely to take entries unless getting any strong confirmation.
Technical analysis
Although multiple hurdles test EUR/USD bulls below 1.2210, even short-term bears may not risk entries unless witnessing a daily closing below April’s top of $1.2149.
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