coronavirus vaccine

Dear traders,

Investors mulled the possibility that a U.S. fiscal-relief package might be delayed and the U.S. dollar advanced amid increasing risk aversion.

On the pandemic front, vaccine coverage won’t reach a point that would stop transmission of the virus in the foreseeable future, the World Health Organization said Monday.

Short traders in the EUR/USD, GBP/USD and DAX were able to take some profits with the DAX being the worst performer yesterday. The index dropped more than 3 percent to a low of 13600 and if there is a sustained decline below 13600, we brace for lower targets at 13450-13400 and 13300.

EUR/USD: After the pair failed to overcome the 1.22-mark, a correction was inevitable. Lower targets are now at 1.2050 and 1.1950, whereas on the upside we see a short-term resistance at around 1.2240.

GBP/USD: Traders should pay attention to price breaks either above 1.37 or below 1.36 which could invigorate fresh momentum.

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Dear traders,

The best performer Monday was the British pound that rallied as signs the U.K. and European Union are close to agreeing a trade deal. The latest progress in the development of a coronavirus vaccine bolstered the currency’s upward move.

Bulls in the GBP/USD profited while sterling rose to the highest level since early September. Looking ahead, the potential for progress in Brexit talks, growing optimism for a vaccine and fresh fiscal stimulus should keep the cable supported.

We bear in mind, that a Brexit deal is largely priced in to the pound, which is why a breakdown in talks would see a much larger move lower.

The euro experienced a sharp reversal after the U.S. dollar gained traction on better than expected flash PMI data. The monthly PMI report crushed market forecast as it came in at a five-year high.

From a technical perspective, not much has changed in the EUR/USD. Above 1.1920 gains may be extended towards 1.1960 whereas below 1.1790 the euro may slip towards 1.1690.

The U.S. dollar could experience bullish tailwinds in short-term time frames as robust U.S. economic data could downplay the urgency of another fiscal stimulus package or additional accommodation from the Federal Reserve.