EUR/USD clings to gains near session tops, around 1.1830 area post-German Ifo
- A combination of factors assisted EUR/USD to regain positive traction on Tuesday.
- The upbeat market mood undermined the safe-haven USD and remained supportive.
- The common currency got an additional boost from Tuesday’s upbeat German data.
The shared currency picked up pace during the early European session and pushed the EUR/USD pair to fresh daily tops, around the 1.1830 region post-German Ifo survey.
Following the previous day's intraday pullback of around 65 pips, the pair caught some fresh bids on Tuesday and was being supported by a combination of factors. The global risk sentiment remained well supported by the optimism over a potential vaccine and treatment for the highly contagious coronavirus disease. The risk-on flow undermined the US dollar's relative safe-haven status and assisted the EUR/USD pair to regain some positive traction.
Meanwhile, the shared currency got an additional boost after the final version of the German GDP was revised higher to show that the economy contracted by 9.7% during the second quarter of 2020 as against 10.1% estimated earlier. Adding to this, the German Ifo Business Climate Index rose to 92.6 in August from the 90.5 previous and surpassed consensus estimates pointing to a reading of 92.2, which remained supportive of the modest uptick.
It, however, remains to be seen if bulls are able to capitalize on the move or the pair once again meets with some fresh supply at higher levels. Investors might refrain from placing aggressive bets ahead of the Fed Chair Jerome Powell's speech at the Jackson Hole Symposium. This, in turn, might keep a lid on any strong gains for the EUR/USD pair.
In the meantime, Tuesday's release of the Conference Board's US Consumer Confidence Index might influence the USD price dynamics and produce some short-term trading opportunities later during the early North American session.
Technical levels to watch