EUR/USD keeps around 1.1850 for the time being
The dollar is mildly weaker as we get things underway in European morning trade today, with major currencies tilting slightly in the same direction as equities for now.
The more upbeat tone in European and US futures is helping to pin the dollar a little lower with EUR/USD up about 15 pips near 1.1850 to start the session.
Price action shows that the near-term bias is keeping more bullish on a break above the 100-hour MA (red line) since Friday but gains aren't running away just yet with key resistance still seen closer towards 1.1900 – where the upside stalled last week.
But for now, near-term support can be defined by the confluence of the key hourly moving averages @ 1.1809-13. Keep above that and the bias stays more bullish but break below that the bias then turns more bearish instead.
The market is filled with contrasting narratives at the moment and it is all about the push and pull to see who comes out on top.
An argument can be made for risk-off on rising coronavirus cases in Europe and the US with central banks also turning more pessimistic ahead of the year-end. Fiscal hopes are also fading and there is the likelihood of tighter restrictions to follow as well.
On the flip side, vaccine optimism and easy money continues to drive flows into risky assets. Moderna may announce an update on their vaccine trials data this week, so investors may be looking to that to drive further gains akin to the Pfizer news last week.
Hope versus fear. That is likely to emerge as the key theme this week. Pick your side.