- EUR / USD reversed an intraday decline to the 1.2200 mark and rallied closer to multi-year highs.
- A slight rebound in equity markets extended some support and helped limit the first decline.
- Nervousness from COVID-19, a stronger impression of US GDP supported the USD and capped gains for the major.
EUR / USD has retreated to daily highs, around the 1.2255-60 area in the past hour, although quickly retreated a few pips thereafter. The pair was last seen trading around the 1.2235 region and had a rather muted reaction to US macro data.
The pair managed to attract dips near the 1,2200 round-digit mark and moved well within the striking distance of over two and a half years of highs set last Thursday. The intraday rebound was exclusively sponsored by a slight pullback in the US dollar from daily highs, although it lacked solid tracking.
The approval of a long-awaited US stimulus package helped alleviate concerns over the discovery of a new strain of coronavirus and the imposition of strict lockdowns / travel restrictions in the UK. This was evident thanks to a positive rebound in equity markets, which did not help the US dollar maintain its intraday gains.
That said, the underlying cautious mood continued to support the greenback’s safe-haven status and limit further gains for the EUR / USD pair. The USD was further supported by the final impression of US GDP, which showed the economy grew 33.4% annualized in the third quarter, compared to an estimated 33.1%.
Tuesday’s US economic record also includes the release of the Richmond Manufacturing Index, the Conference Board’s Consumer Confidence Index and existing home sales. The data, along with the developments surrounding the coronavirus saga, will influence USD price dynamics and create short-term trading opportunities around the EUR / USD pair.
Technical levels to watch