The Euro came under light selling pressure against as we entered today’s European trading session but by early afternoon it had recovered all the losses and entered positive territory as the market awaits economic data due to be released from the US.
The Pending Home Sales numbers and Goods Trade Balance figures will hit the market later today and although important, are unlikely to cause much volatility in the EUR/USD currency pair as market participants keep their attention focused on developments regarding the variant of the coronavirus, namely omicron
The US, the UK, France, Greece and Portugal all registered record-high one-day increases in new coronavirus cases on Tuesday but that didn’t stop the US from introducing legislation, cutting the the recommended isolation time for Americans with asymptomatic cases of COVID 19 to five days from the earlier recommended time of 10.
The same idea was put forward to the UK government with a recommendation to cut the current self-isolation time from 7 days to 5 days but it was rejected and shows the US government is definitely more lenient and aggressive with regards to keeping their economy running and this is likely to support the US dollar as we enter the new year.
On the chart we can see the same old story as we have seen for the last 5 trading sessions with the EUR/USD currency pair stuck in a tight trading range between the bottom line of the downward channel which started in June and the stubborn resistance level of $1.1342 which the Euro can’t seem to break.
As long as the Euro can stay above the bottom channel line until the year closes it will probably be a positive sign and means there are plenty in the market not quite ready to write off the European currency.