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A bit of optimism boosted high-yielding bets against the dollar during the Asian session. But can euro bulls maintain their gains in the next trading session?

Currency Snapshot:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • G7 meetings ongoing
  • France’s Markit PMIs at 8:15 am GMT
  • Germany’s Markit PMIs at 8:30 am GMT
  • Euro Zone’s Markit PMIs at 9:00 am GMT
  • U.K.’s Markit PMIs at 9:30 am GMT
  • BOE’s FPC statement and meeting minutes at 9:30 am GMT
  • U.S. Markit PMIs at 1:45 pm GMT

What to Watch: EUR/USD

EUR/USD 1-hour Forex Chart
EUR/USD 1-hour Forex Chart

The Fed’s unli-QE plan and hopes of a ginormous stimulus bill in the U.S. inspired some risk-taking in the Asian markets and took some shine off the dollar.

But how long can high-yielding bets like the euro keep up their gains against the safe haven? While COVID-19-related deaths in Italy have slowed down a bit, numbers from major Euro Zone economies like Germany, France, and Spain suggest that they might be going down Italy’s path soon.

EUR/USD is now having trouble trading above 1.0800, a resistance that hasn’t been broken since last week.

This time around, a 100 SMA and a low key divergence is also getting the bears’ attention.

Even MarketMilk is on the bears’ side as it recognizes EUR/USD’s “bullish” trend against shorter-term moving averages even as it’s still on the “bearish” side when longer-term moving averages are applied.

Bears can short at current levels and aim for a retest of last week’s lows. Meanwhile, euro buyers can wait for a break above the 100 SMA and consider a retest of previous areas of interest like 1.0950.

Whichever side you choose to trade today, consider your EUR/USD volatility analysis in placing your entry, stop, and profit targets.