- EUR/USD pushes higher and tests the 1.1930 area.
- Risk-on mood continues to dominate the markets’ sentiment.
- Attention will be on the US calendar, FOMC Minutes.
The single currency extends the recent optimism and pushes EUR/USD to fresh monthly tops past the 1.19 mark on Wednesday.
EUR/USD propped up by sentiment, risk trends
EUR/USD manages to advance further north of the 1.19 level and clinch new monthly highs near 1.1930, always in response to the persistent selling pressure surrounding the greenback.
In fact, risk appetite trends continue to underpin the demand for riskier assets on the back of solid hopes regarding the delivery of a COVID-19 vaccine sooner rather than later.
In the same line, prospects of US extra stimulus have gained renewed traction in past hours, particularly after the Trump’s administration paved the way for the start of the transition process towards a Biden’s presidency.
Later in the session, the ECB will publish its Financial Stability Review ahead of the participation of the Board member K. af Jochnick in a panel discussion on “Impact of Covid-19 on bank capitalization and resolution”.
The focus of attention, however, will be on the US docket, where usual weekly Claims, PCE figures and the FOMC Minutes will all be in the limelight.
What to look for around EUR
EUR/USD manages to leave behind the 1.19 mark amidst a favourable atmosphere for the risk complex. In the very near-term, EUR/USD appears supported by prospects of a strong recovery in the region along with the increasing likelihood of extra stimulus in the US. Risks to this positive view emerge from the potential political effervescence around the EU Recovery Fund and increasing chances of further ECB easing to be announced as soon as at the December meeting.
EUR/USD levels to watch
At the moment, the pair is gaining 0.15% at 1.1907 and a break above 1.1929 (monthly high Nov.25) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1). On the flip side, immediate contention aligns at 1.1745 (weekly low Nov.11) followed by 1.1709 (Fibo level of the 2017-2018 rally) and finally 1.1602 (monthly low Nov.4).
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