Home Forex News EUR/USD Range Bound After Retreating From 3-Month Highs

EUR/USD Range Bound After Retreating From 3-Month Highs

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  • Coronavirus Concerns
  • Dollar resurgence
  • U.S Economic Releases

EUR/USD pair recovered slightly, Thursday morning after coming under pressure on Wednesday. Bearish traction on the pair has gathered pace in recent sessions amidst on U.S dollar resurgence on growing concerns of the second wave of coronavirus infections in the U.S and China.

U.S Dollar Bounce Back

Rising coronavirus infections continues to trigger a spike in risk sentiments, a development that has forced traders to scamper for safety in safe-havens. The dollar has since rebounded against other major currencies, conversely sending the EUR/USD pair lower.

A lack of new catalysts within the Eurozone to affirm EUR strength at three-month highs has all but continued to fuel selloff on the pair. Bearish sentiments continue to build as the Greenback shows signs of bouncing back from three months lows.

The dollar held on to gains on Thursday as the second wave of coronavirus raised concerns as to whether the U.S economy will bounce back. Federal Chair Jerome Powel casting negative outlook about the U.S economy has all but continued to fuel risk sentiments in the market.

EUR/USD Outlook

With more than 25 million Americans displaced from work, the second wave of infections could take a toll on an already fragile U.S economy. The FED chair has already hinted at interest rates remaining at all-time lows as the road to recovery looks bleak. The dollar tends to rally in times of such crisis, seen as one of the reasons why the EUR/USD pair edged lower on Wednesday before bouncing back, slightly, early Thursday.

While the Eurozone data docket is light on Thursday, the focus will be on releasing the Philly FED manufacturing index later in the day. The market also awaits the U.S unemployment claims release, likely to sway investors’ sentiments on the dollar conversely influence EUR/USD price action. In the European session, the session will focus on releasing the European Union’s monthly economic bulletin.

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