In spite of optimism over the latest reports on the COVID-19 vaccine front, currency traders have a lot to worry on, as prevailing reports show COVID-19 infections are not anyway under control coupled with fears that there might not be a smooth transfer of U.S presidential power in January 2021 as made it imperatively difficult for U.S dollar index bulls breaking above 93.
Also dampening the safe-haven currency is the continual rise in COVID-19 cases, in the world’s largest economy, the number of deaths, and COVID-19 raised concern about the path of global economic recovery amid concerns raised by the U.S central bank indicating a huge concern for what is bound to be a winter of uncertainty on the COVID-19 front.
This macro triggered a downside momentum in the U.S dollar index yesterday as it battles to stay afloat the key 6-month support line in the 92.45/40 range.
Although the macro coming from leading COVID-19 vaccine makers saw the greenback rise against safe-haven currencies like the Japanese yen and Swiss franc. As long as the U.S dollar index trades below the 200-day Simple Moving Average, around 96.30, currency traders view the mid-term trend is bearish.
Strong bias that there will be logistics challenges distributing the COVID-19 vaccines curbed the initial enthusiasm seen among currency traders lately in breaking above 93.5.
Momentarily at the time of writing this report, trading ranges prevailing in the currency market seems to be pretty tight as the EUR/USD pair got stuck around the 1.18-1.19 price level, on the bias that a break above 1.19 could trigger more upsides taking into considerations recent dovish comments from U.S Fed Chairman Jerome Powell coupled with weak US macro-economic data will definitely tame the U.S bulls at least in the near term.