- EUR/USD refreshes intraday high during a corrective pullback from early multi-day lows.
- European leaders fear virus conditions, signal darker days ahead.
- Fed’s Daly raises doubts on the US employment conditions, China levies sanctions on the UK.
- German IFO figures, US Core PCE data will be the key.
EUR/USD extends bounce off November 12, 2020, while rising to 1.1775, up 0.10% intraday, amid Friday’s Asian session. In doing so, the quote tracks the recent run-up in the S&P 500 Futures despite witnessing no positive signals.
Comments from San Francisco Fed President Mary C. Daly seems to be the first in the recent days to who sounds cautious over the US jobs market while rejecting negative rates and inflation fears. In doing so, the policymaker contrasts Fed Chair Jerome Powell who recently flashed signals of what could propel the tapering of Quantitative Easing (QE) despite rejecting it on the first hand for now.
Elsewhere, China announced the fresh sanction on UK individuals and entities over Xinjiang comments. Also on the risk-negative side could be comments from the European Summit where the bloc leaders cited fears of the third covid wave and further activity restrictions.
Given the mixed plays at Europe and the US, comparative vaccine and fiscal advantage of America seemed to have helped the US dollar off-late. However, the recent economic fears, despite upbeat GDP and Jobless Claims, probe the greenback bulls.
Amid these plays, the S&P 50 Futures print 0.20% intraday gains whereas the US 10-year Treasury yield adds 1.4 basis points to the previous recovery move.
Although the Asian economic calendar is mostly empty, risk headlines can entertain EUR/USD traders ahead of Germany’s IFO sentiment figures for March and the US Fed’s preferred measure for Inflation, namely Core Personal Consumption Expenditure – Price Index, for February.
Read: The February Grab-Bag Preview: Personal Income, Spending, Core PCE Prices and GDP
Technical analysis
Although a seven-week-old support line triggered EUR/USD bounce from 1.1760, buyers aren’t likely to return unless witnessing a bounce back beyond the 200-day SMA level of 1.1870.
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