The EURUSD pair surged 0.42% to 1.1338 on Tuesday, November 30. The single currency started trending higher during the APAC session. The single currency gained support as a preferred funding currency after remarks from Moderna CEO Stephane Bancel. Risk aversion set in right after his interview with The Financial Times. Bancel stated that current Covid-19 vaccines are likely to be less effective against the new strain and it would take months before pharmaceutical companies could manufacture modified vaccines. The oil market, as well as the aussie and kiwi dollars retreated sharply on the back of these comments.
From its intraday high of 1.1382, the euro fell 147 pips to 1.1235. This move came as a reaction to a speech by Fed Chair Jerome Powell before the Senate Banking Committee. Powell pointed out that the central bank could speed up the timetable monthly bond purchases due to rising inflationary risks, putting pressure on markets already wary about news of a new Covid-19 variant.
Price action rebounded by 110 pips from 1.1235 to 1.1345. The aussie and the kiwi pared all their losses, up 110 and 89 pips, respectively, including Wednesday trading.
Today’s macro agenda (GMT+3)
Jerome Powell and Janet Yellen are scheduled to speak again on Wednesday, although we do not expect to see any major price fluctuations such as 110-150 pips. Market participants are gearing up for Friday's NFPs report, while awaiting updates on Omicron. Today’s key macro event will be the private sector ADP paryrolls report.
Risk assets are trading in positive territory. EURUSD has found an equilibrium point between supply and demand in the vicinity of the 90-degree angle at 1.1341. Support islocated at 1.1289 and resistance at 1.1386. Given that NFPs are due out on Friday, the odds are high that the key pair will trade in the range of 1.1235-1.1382 until Friday. Any negative Omicron news will exert a positive impact on the single currency.