EUR/USD pressures the 1.1300 level mid-US afternoon, trading at the lower end of its latest range. The data from the US showed that the weekly Initial Jobless Claims increased to 222K from 194K but market participants paid no attention to this reading ahead of Friday's November jobs report. The EUR/USD pair keeps trading within familiar levels above the 1.1300 figure, modestly up on Thursday. The market is in wait-and-see mode, as uncertainty arose following the announcement of a new COVID-19 variant and comments from US Federal Reserve chair Jerome Powell, who hinted at speeding up tapering amid persistently high inflation. Meanwhile, stocks trade with a sour tone, while US Treasury yields are under mild pressure, weighing on the greenback at the time being.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Yet the dollar recovery has been far less impressive. EUR/USD was trading close to 1.1200 prior to the omicron news and is only about 30-40 pips below Tuesday’s 1.1385 highs. Uncertainty regarding the new variant remains elevated and it seems that this, combined with profit-taking on the overbought dollar (particularly versus the euro) is keeping EUR/USD supported. In terms of the technicals; EUR/USD is currently testing a key downtrend that acted as support until mid-November but is now acting as resistance. This, coupled with the earlier weekly highs and 21-day moving average in the 1.1380s, is likely to continue capping the price action for now.

EURUSD Dominated By Bears

Dec 02 2021