- The USD witnessed some profit-taking and assisted EUR/USD to rebound from the 1.1800 mark.
- Renewed coronavirus jitters might hold bulls from placing aggressive bets and cap the upside.
- Investors now look forward to comments by ECB’s Lagarde and Fedspeak for a fresh impetus.
The EUR/USD pair staged a modest recovery from four-month lows and was last seen hovering near the top end of its daily trading range, around the 1.1820-25 region.
The pair once again showed some resilience near the 1.1800 mark and managed to gain some positive traction during the early part of the trading action on Thursday. Despite a selloff in Chinese tech stocks, Asian equities kicked off the day on a positive note. This acted as a headwind for the safe-haven US dollar, which, in turn, was seen as a key factor lending some support to the EUR/USD pair.
However, any meaningful recovery still seems elusive amid concerns about the economic impact of the third wave of COVID-19 infections in Europe. Investors seem worried that pandemic-related restrictions could derail the fragile Eurozone economic recovery. This was reinforced by a rather muted market reaction to Wednesday’s stronger flash Eurozone Manufacturing and Services PMI prints for March.
On the other hand, the impressive pace of coronavirus vaccinations and the passage of a massive stimulus package continued fueling expectations for a relatively faster US economic recovery. The continuous widening of the gap in the US and European COVID-19 response might hold traders from placing any aggressive bullish bets around the shared currency and cap the upside for the EUR/USD pair.
There isn’t any major market moving economic data due for release from the Eurozone, leaving the EUR/USD pair at the mercy of the USD price dynamics. That said, comments by the ECB President Christine Lagarde – during a virtual panel discussion hosted by the Bank for International Settlements – might influence the shared currency and provide a fresh impetus to the major.
Meanwhile, the US economic docket highlights the release of the final Q4 GDP print. This, along with speeches by a slew of FOMC members and the US bond yields, will play a key role in driving the greenback. This might further contribute to produce some short-term trading opportunities around the EUR/USD pair later during the North American session.
Technical levels to watch
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