Recent Covid optimism helped EUR/USD stage a solid rebound on Wednesday, as Pfizer and BioNTech announced that their vaccine could neutralize the Omicron variant (B.1.1.529 lineage), according to preliminary laboratory studies. 
However, markets are weighed by UK's tougher pandemic measures that were announced yesterday in order to combat the spread of the pandemic  and WHO's Dr Tedros comments that the variant "could have a major impact on the course of the pandemic" .
Wednesday's advance stopped well short off the key 1.1380-1.1400 region, where the EMA200, the descending trend-line from October highs, the December high and the "October High/November Low" drop, converge.
As such, the outlook has not changed from our previous articles, as bears continue to be at the driver's seat. Risk for sub-1.1250s moves is high, although it may be early for fresh 2021 lows (1.1184).
On the other hand, EUR/USD has shown resiliency over the last few weeks and as long as sentiment does not sour, it has the ability to try for the aforementioned 1.1380-1.1400 area. This will likely need an impetus and daily closes above are needed for the downtrend to pause and allow it look towards 1.1523.
Any noteworthy movement may prove elusive today, since the economic calendar is light, with US Jobless Claims standing out. On Friday though, investors will turn to US CPI Inflation.
Past Performance: Past Performance is not an indicator of future results.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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