The euro and the pound were higher in the European session on Tuesday, as European shares rose amid optimism about strong earnings and signs of progress in U.S.-China economic and trade talks.

Solid earnings results from UBS, Reckitt Benckiser and other companies helped offset concerns about inflation and growth.

Investors looked ahead to central bank meetings in Europe, Japan and Canada for policy outlook.

The ECB decision is due on Thursday, with investors awaiting more clarity on ending the stimulus under its pandemic emergency purchase programme.

The Bank Lending Survey from the European Central Bank showed that Eurozone banks plan to tighten their conditions for housing loans further in the fourth quarter.

In the fourth quarter, banks plan to tighten credit standards for loans to firms and to ease criteria slightly for consumer credit.

The pound touched 5-day highs of 1.3825 against the greenback and 1.2718 against the franc, up from its previous lows of 1.3757 and 1.2630, respectively. The pound is likely to find resistance around 1.41 against the greenback and 1.30 against the franc.

The pound came off from its early lows of 0.8436 against the euro and 156.44 against the yen, spiking up to an 8-month high of 0.8404 and a 4-day high of 157.58, respectively. If the pound rises further, 0.82 and 160.00 are possibly seen as its next resistance levels against the euro and the yen, respectively.

The euro was up against the franc, at a 5-day high of 1.0703. On the upside, 1.10 is possibly seen as its next resistance level.

Recovering from its prior lows of 1.1594 against the greenback and 131.94 against the yen, the euro edged higher to 1.1625 and 132.54, respectively. The euro is seen finding resistance around 1.18 against the greenback and 134.00 against the yen.

The euro rebounded to 1.5493 against the aussie, after touching 1.5432, its lowest level since May 10. Next key resistance for the euro is seen around the 1.56 level.

In contrast, the European currency resumed its decline against the kiwi, touching more than a 4-year low of 1.6157. Further downtrend may take the euro to a support around the 1.59 level.

The euro edged down to 1.4353 against the loonie from yesterday's close of 1.4366. Should the euro extends decline, 1.42 is possibly seen as its next support level.

Looking ahead, U.S. consumer confidence index for October, new home sales for September, FHFA's house price index and S&P/Case-Shiller home price index for August will be out in the New York session.

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