EUR/USD locks in a 4th straight day of gains on tailwinds regarding European stimulus and vaccine tailwinds. The EUR/USD sits at around the 1.1428 level, hitting a healthy resistance level as bulls ride risk on optimism.
Many European countries such as Italy, Spain, and Germany have had an effective lockdown, squashing Coronavirus cases and giving Europe a general sense of control over the virus. However, it is far from over as Germany's Angela Merkel and Italy's Giuseppe Conte fight other member states to show collective solidarity on the Coronavirus recovery fund. However, Merkel points out that it may not be enough, stating that "I don't know whether one will be enough or whatever," and they "[they] will need to meet a second time before the end of summer." This is on the back of the UK and Italy, breaking 100% and 150% Debt to GDP ratios
Modern's vaccine trials showing positive results provided a boost to risk assets and, inherently, weaken the dollar haven, strengthening currencies such as the Euro and the Aussie dollar. Dr. Penny Heaton, Chief Executive of the Bill and Melinda Gates medical research institute, stated that the results of the most recent peer-reviewed study "are promising, and they support the continued development of the vaccine." However, she also said that "However, we must bear in mind the complexity of vaccine development and the work still to be done before Covid-19 vaccines are widely available."
Citibank's analysts predict a large jump to 1.14 in the three-month range and 1.17 in the six to twelve-month scale. However, the currency pair is currently hitting a historically strong resistance, which may see the Euro push lower if there is no further positive news regarding the recovery fund or the vaccine.
Anish Lal, a Senior Analyst here at Blackbull Markets did some brilliant technical analysis on the EUR/USD. You can watch it here.