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The EUR/USD is up for the first time this week as global risks ease. It is trading at 1.2190, which is slightly higher than this week’s low of 1.2130.
UK situation improves
The EUR/USD declined sharply in the past two days as traders continued to fear about the situation in the UK. That happened as the country started to experience a new variant of coronavirus that spreads 70% faster than the original one. As a result, more than 50 countries, including Germany and France closed their doors to and from the country.
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In a statement yesterday, France said that it would allow truckers to deliver goods to and from the UK provided that they pass the coronavirus test. In its part, the UK has deployed thousands of workers to conduct mass testing at the border. Analysts at most CFD trading brokers believe that other countries will do the same.
Meanwhile, Boris Johnson and Ursula von der Leyen continued their Brexit talks, with hopes that they will reach an agreement. Analysts believe that the two sides will ultimately reach an agreement before the December 31st deadline. That’s because of the significant risks of not reaching a deal. Also, the outstanding issues like fisheries are relatively small compared to the bigger picture.
US strong economic data
The EUR/USD is also reacting to the overall strong economic data from the United States. In a report yesterday, the country’s statistics bureau said that the American economy bounced back by 33.4% in the third quarter.
That was a better performance than the first two estimates of 33.1%. It was also stronger than the second quarter’s contraction of 31.4%. GDP sales increased by 3.7% while real consumer spending rose by 41.0%. Corporate profits also rose by 27%.
Later today, the EUR/USD will react to the latest jobless claims numbers from the US. Economists polled by Reuters expect the data to show that initial claims increased by 885k last week.
Other important economic numbers will be personal spending and income, new home sales, and the Michigan consumer sentiment data.
EUR/USD technical outlook
The EUR/USD pair is trading at 1.2190. On the daily chart, this price is slightly below the year-to-date high of 1.2275. This price is at the same level as the 15-day exponential moving averages and is also slightly above the 25-day EMA.
Also, the Relative Strength Index has moved from the overbought level of 76 to the current 62. Therefore, the pair will possibly resume the downward trend as bears target the next support at 1.2013.
