EUR/USD bounces above 1.18 but maintains a bearish bias

The EUR/USD pair remained under selling pressure early Wednesday, bottoming for the day at 1.1752, from where it jumped above 1.1800 amid a sudden U-turn in dollar’s demand. Nonetheless, EUR/USD maintains its bearish bias in the short-term, and it has room to pierce 1.1700, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“The catalyst seems to be a headline from Bloomberg, indicating that some ECB policymakers have become more confident in their forecasts for the region’s economic recovery, potentially reducing the need for more monetary stimulus this year. However, concerns remain the same. Tensions between the UK and the EU over their future trade relationship persist. Even further, during the past Asian session, AstraZeneca and the Oxford University announced they paused trials for its coronavirus vaccine amid ‘an unexplained illness’ in one participant.” 

“Despite its latest bounce, the EUR/USD pair is still bearish, according to the 4-hour chart. The latest bounce was capped by sellers aligned around a bearish 20 SMA, which maintains its bearish slope below the larger ones. Technical indicators, in the meantime, recovered from oversold readings but turned flat within negative levels.” 

“Renewed selling interest below 1.1760 will likely result in a steeper decline, while bulls could have better chances on a break above 1.1840.”