EURUSD recovered more than 200 pips after hitting a low of 1.0220. It gained despite a surge in COVID cases in China. According to the National health commission, the number of new coronavirus cases jumped to 39791 and the total number of death rose to 5233. Markets eye ECB President Lagarde for further direction. It hits an intraday high of 1.04563 and is currently trading around 1.04496.
According to the CME Fed watch tool, the probability of a 75 bpbs rate hike in Dec increased to 25.3% from 24.2% a week ago.
The US 10-year yield breaks significant support by 3.67% and hits a fresh 2-week low. The US 10 and 2-year spread widened to -78 basis points from -57 bpbs.
Technical:
On the higher side, near-term resistance is around 1.0500 and any convincing breach above will drag the pair to the next level of 1.0550/1.06450.
The pair's immediate support is at 1.0380, breaking below targets of 1.0300/1.02700/1.02200.
Indicator (4-hour chart)
Directional movement index – Bullish
It is good to buy on dips around 1.0418-20 with SL around 1.0350 for a TP of 1.0550.
