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  • EUR/USD recovery attempt loses steam below 1.1840.
  • The euro trims losses with USD pulling back as risk aversion eases.
  • EUR/USD: remains neutral on the short-term while below 1.1870.

The euro trimmed losses on the early US session on Tuesday, after trading lower in Europe, dropping to session lows at 1.1795.  The pair, however, seems unable to extend recover beyond 1.1840.

Concerns about the COVID-19 spread in Europe hurt the euro

The common currency appreciates about 0.2% on the day, regaining approximately half of the ground lost on Monday. The risk-averse sentiment seen at the weekly opening was reflected in sharp declines in equity markets and a strong US dollar.

EUR/USD retreated again on the European session on Tuesday, with the investors’ still wary that the surging numbers of coronavirus infections in Europe might derail the embryonic economic recovery. Beyond that, the uncertainty about the outcome of the US presidential elections has favoured safe assets further, in detriment of the euro.

The market sentiment seems to have brightened somewhat during the North American session with US macroeconomic data contributing to ease fears. Better than expected US durable goods orders and housing prices have brightened the mood, sending the safe-haven USD lower, which has helped the euro to bounce up.

EUR/USD: needs to break above 1.1870 to gain momentum

On the technical level, the euro-dollar remains neutral on the short-term, according to Valeria Bednarik, Chief Analyst at FXStreet: “The short-term picture is neutral, according to the 4-hour chart, as the EUR/USD pair remains unable to surpass a mildly bearish 20 SMA, now struggling around it. The longer moving averages remain below the current level, with limited directional strength. Technical indicators, in the meantime, are stuck to their midlines.”

Technical levels to watch