EURUSD may need the additional catalyst to make a decisive break above the 1.1860 level that represents a fairly stiff local resistance

After a positive week, the euro opened on a negative footing on Monday as the greenback turned positive against major rivals amid the resurgent risk aversion. Despite the selling pressure in stock markets looks limited, the safe-haven USD demand has been denting bullish attempts in the common currency. 

EURUSD was also pressured by negative economic signals from Europe. In Germany, business morale fell for the first time in six months in October, the Ifo survey showed on Monday. The business climate index fell to 92.7 from a downwardly revised 93.2 in September versus 93.0 expected. Besides, Bundesbank confirmed that German economic recovery continuing at a much slower pace, with a rise in virus infections, coupled with restrictions, hitting the services industry. 

As a result, the euro dipped to the 1.1800 support earlier in the session and bounced but stayed in the red in the daily charts. As of writing, the pair was changing hands 1.1820, refraining from challenging the 20- and 100-SMAs on the hourly charts that converge in the 1.1840 area. If the prices manage to overcome this initial barrier, the next hurdle should be expected at 1.1860. However, EURUSD may need the additional catalyst to make a decisive break above this level that represents a fairly stiff local resistance. 

In a wider picture, however, the pair remains bullish, holding above the ascending 20-weekly SMA since late-May. The key hurdle for bulls still arrives at the 1.20 handle that capped the rally on September 1st. on the downside, the key support is represented by the 1.16 figure.

Later this week, the Eurozone and US GDP data as well as the ECB meeting outcome could affect short-term dynamics in the EURUSD pair. It is widely expected that the central bank will confirm its readiness to take additional supportive measures if necessary. Meanwhile, the key risk event in the form of the US presidential election is going to take place next week. 


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