EUR/USD extends two-day winning streak as US stock futures rise
- EUR/USD prints gains as risk-on weighs over the safe-haven greenback.
- Risk assets rise on hopes for coronavirus vaccine and ASEAN trade deal.
- The rising coronavirus cases across the Eurozone could cap upside in the EUR.
EUR/USD trades in green in the 1.1850 neighborhood alongside the coronavirus vaccine-led enthusiasm in the stock markets. The pair gained 0.22% and 0.27% on Thursday and Friday, respectively.
Focus on risk-on
The futures tied to the S&P 500, Wall Street's benchmark index, are currently trading 0.8% higher on the day and the major Asian indices are up at over 1% each. As such, safe havens such as the US dollar are losing ground.
The strength in the risk assets could be attributed to expectations for coronavirus vaccine and the ASEAN trade deal. Having digested the US pharma giant Pfizer's recent disclosure of positive results of its coronavirus vaccine, traders expect the biotechnology company Moderna to follow suit this week.
The odds of faster economic recovery across Asian have increased with Ten ASEAN nations: Vietnam, Thailand, the Philippines, Laos, Cambodia, Myanmar, Malaysia, Singapore, Indonesia, and Brunei, along with Australia, China, Japan, New Zealand, and South Korea signing the world's largest free-trade agreement over the weekend.
As long as the focus remains on these factors, the EUR could continue to rise during the day ahead. Readers should note that the rising number of coronavirus cases pose a downside risk to the Eurozone economy and EUR/USD. Further, the US-China tensions could resurface, putting a bid under the greenback. According to Axios' report, the incumbent US President Donald Trump is planning a flurry of aggressive policy moves against China in the coming 10 weeks.
Technical levels