EUR/USD to test 1.19 as the broader market sentiment favors appreciation

EUR/USD has been recovering as the Biden transition gets underway and bulls are readying another attack on 1.19 while economic data becomes great again, Yohay Elam, an Analyst at FXStreet, reports.

Key quotes

“The safe-haven dollar is on the back foot once again after President Donald Trump authorized the General Services Administration to facilitate the transition to President-elect Joe Biden. A smoother transition reduces the already low risk that Trump clings to power and also allows Biden and his team to have better chances of boosting the economy.” 

“Janet Yellen, former Chair of the Federal Reserve, is set to lead these efforts as the new Treasury Secretary. Markets cheered the news of her nomination, also adding to pressure on the greenback. Yellen will likely push for more fiscal stimulus yet without advocating for left-leaning policies. She is a proponent of free trade.” 

“The old continent's coronavirus cases continue their gradual decline, contrary to the increase in the US, a factor underpinning the common currency.”

“Tuesday's calendar kicked off with an upgrade to Germany's Gross Domestic Product figures for the third quarter, 8.5% compared with 8.2% originally reported. Another release from Europe's largest economy is eyed – the IFO Business Climate for November, which is set to point to a decline in sentiment amid lockdowns.” 

“EUR/USD has recaptured the 50 Simple Moving Average on the 4-hour chart and benefits from minimal upside momentum. Bulls have an advantage but are not in full control. Some resistance awaits at 1.1895, which capped the pair last week, followed by 1.1905, Monday's high. The first cushion is at 1.1850, which held EUR/USD up last week, followed by 1.11815.”