EUR/USD is rebounding above 1.1000, as bears take a breather after posting the biggest daily loss in 1.5 months. The pair is benefiting from the latest retreat in the US Dollar amid a recovery in risk sentiment and ahead of US Durable Goods data.
After having lost more than 70 pips on Tuesday, EUR/USD has regained its traction and climbed above 1.1000 early Wednesday.
Rising US stock index futures point to a positive opening in Wall Street, which could put additional weight on the US Dollar’s (USD) shoulders and help the pair keep its footing in the second half of the day.
Related- Understanding Exchange Rate in Forex
The risk-averse market environment allowed the USD to find demand as a safe haven and to outperform its rivals on Tuesday. With Microsoft and Google Alphabet reporting better-than-expected earnings for the first quarter after the closing bell, however, the USD lost its strength during the Asian trading hours. In the early European morning, Nasdaq Futures are up more than 1%, reflecting the improving risk mood.
In the early American session, the US Census Bureau will release the Durable Goods Orders data for March, which is forecast to print a monthly increase of 0.8% following February’s 1% contraction. In case there is an unexpected decrease in that data, the USD could come under renewed selling pressure.
On the other hand, a positive print is unlikely to help the USD regather its strength unless it’s accompanied by a negative opening in Wall Street.
Having said that, investors could still opt to wait for the first quarter Gross Domestic Product (GDP) data on Thursday before deciding the USD’s next short term direction and force EUR/USD to stay in its weekly trading range.