The EUR/USD is hovering near its April 2018 highs even as more European countries start preparing for more lockdowns. The EURUSD pair, which rose by more than 8% in 2020, is trading at 1.2245, which is slightly below 2020 high of 1.2318.
What’s happening: The EUR/USD is rising today, mostly due to the overall dollar weakness. The dollar index has dropped by more than 0.25% as the risk-on sentiment in the market continues.
According to the Financial Times, more EU member states are preparing to extend their lockdowns as the number of coronavirus cases rise. For example, the number of new infections in Germany rose by roughly 10,000.
As a result, Angela Merkel will meet with states heads today and possibly extend lockdowns even as the country gears towards vaccinations. Other countries like Spain and Italy will also likely extend their lockdowns.What else: The EUR/USD is also reacting to the upcoming run-off election in Georgia and the EU and US manufacturing PMI data. A win by Democrats will be positive for the EURUSD because it will signal more stimulus in the US.
EUR/USD technical outlook
The daily chart shows that the EURUSD pair has continued to rally today. It remains above the vital resistance level at 1.2010 and the short and medium-term moving averages. It has also formed an ascending channel that is shown in pink.
Therefore, the pair will likely continue rising as bulls aim for the upper side of the channel at 1.2318. This trade will be invalidated if the price moves below 1.2200.
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EURUSD technical chart
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