- EUR/USD regained positive traction on Tuesday amid some renewed USD selling bias.
- The USD bulls seemed rather unimpressed by a strong pickup in the US bond yields.
- Disappointing US Consumer Confidence Index failed to provide any respite to the USD.
The EUR/USD pair maintained its bid tone through the early North American session and refreshed daily tops, around the 1.1845 region in the last hour, albeit lacked any follow-through.
The pair caught some fresh bids on Tuesday and moved back closer to the previous day’s swing high amid the emergence of some fresh selling around the US dollar. The optimism over a potential vaccine and treatment for the highly contagious coronavirus disease undermined the greenback’s relative safe-haven status, which, in turn, assisted the EUR/USD pair to regain positive traction.
On the other hand, the shared currency benefitted from upbeat German macro data, which showed that the economy contracted by a record 9.7% in the second quarter of 2020 as compared to 10.1% estimated previously. Adding to this, the German Ifo Business Climate Index rose to 92.6 in August from the previous month’s 90.5 and surpassed consensus estimates pointing to a reading of 92.2.
Meanwhile, the USD failed to get any respite from a strong pickup in the US Treasury bond yields and remained depressed following the disappointing release of the Conference Board’s Consumer Confidence Index. The gauge deteriorated further in August and dropped to 84.8 from the 91.7 previous, missing Reuters’ estimate of 93 by a big margin.
Apart from this, investors also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium later this week. Hence, it remains to be seen if the pair is able to capitalize on the move or runs into some fresh supply at higher levels.
Technical levels to watch