The main currency pair recovered slightly at the beginning of the European session, after the yield on 10-year US government bonds paused around the two-month high, down from one basis point to 1.36% at the moment. However, the US Dollar Index (DXY) refrained from tracking the bond coupon to the south and remained more stable at around 92.55 after the biggest daily jump in three weeks.
In addition to talks about the virus and incentives, market participants remain divided over the European Central Bank’s (ECB) next step and support the search for a safe haven for the US dollar.
It is worth noting that the recent improvement in euro area GDP for the second quarter contrasts with ZEW sentiment data and joins the mixed tone of ECB policymakers to confuse EUR / USD traders ahead of the key event of the week.
During the day, comments from New York Fed President John C. Williams will be key as traders assess the economic difficulties in the United States due to COVID-19 to forecast a decline in asset purchases. In addition, risk catalysts such as stimulus titles and virus updates will also be important for short-term guidance.
From a technical point of view, after a two-week recovery of the most traded currency pair, the price showed a slowdown around the peak of August and the main resistance 1.1900. EUR / USD rejected a break of the downward trend line and closed the last daily bearish candle, indicating that more and more sellers are starting to position themselves. The price is at good levels for positioning the ..bars ”, while in case of a break of the downward trend line and the barrier 1.1900, the buyers will sharpen their attention.