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EUR/USD has retreated from its high above 1.19 amid the market see-saw and as most of the continent remains under restrictions. US politics, German data and coronavirus headlines are set to rock the pair while Tuesday’s 4-hour chart is painting a bullish picture, FXStreet’s Analyst Yohay Elam briefs.

Key quotes

“A vaccine for COVID-19 seems to be within reach after Pfizer and BioNTech announced that their Phase 3 trial yielded 90% efficiency in preventing infections. Scientists outside the project were thrilled with the achievement that could help the world move. After the initial excitement, there is room to hope that immunizing the world is a matter of months – and only requires passing the next few months.”

“‘A dark winter’ is how US President-elect Joe Biden described what is facing Americans as the number of hospitalizations has hit 59,000 in the US – the highest since July. America’s infections and mortalities are on the rise. Biden urged wearing masks and unveiled a coronavirus taskforce as he prepares to take office. However, President Donald Trump is digging in, refusing to accept the results and repeats unsubstantiated claims of fraud.”

“The economic calendar features the German ZEW Economic Sentiment for November, which is set to show a deterioration in confidence. Europe’s largest economy is undergoing its second lockdown, yet the economic impact is set to be smaller than the first shuttering in the spring.” 

“Overall, it seems that after the euphoria and the hangover, optimism about a covid vaccine could push markets higher and the dollar lower – as long as yields do not go wild. It is essential to note that the Federal Reserve continues buying bonds and is likely to keep a lid on returns.” 

“EUR/USD continues benefiting from upside momentum on the 4-hour chart and holds well above the 50, 100, and 200 Simple Moving Averages. The Relative Strength Index is hovering around 50, far from overbought conditions. Resistance awaits at 1.1840, the daily high, followed by 1.11860, which was a separator of ranges in recent days. Support is at 1.1795, Monday’s low, followed by 1.1770, a peak in early November.”