EUR/USD: Friday's upward move to mark the beginning of an uptrend
|EUR/USD has slipped from 1.18 as growth fears boost the safe-haven dollar. However, bad news could turn into good news. Yohay Elam, an Analyst at FXStreet, explains why this slide could be a buying opportunity.
See: EUR/USD to nosedive to 1.12 in 2022 on stark Fed/ECB contrast – SocGen
Speculation about looser Fed policy and Europe's better covid situation to turn the tide
“If price rises are set to fall, the Federal Reserve could keep its monetary policy looser for longer – delay the tapering of its bond-buying scheme. That would mean printing more dollars, weighing on the value of the currency.”
“Printing of greenbacks is also in the realm of the government. Trillions of dollars are on their way, and that could boost sentiment and lift the entire global economy. Investors have been waiting to see it to believe it, but they could begin watching Capitol Hill sooner rather than later.”
“In the old continent, there are reasons to be cheerful about Europe's high levels of vaccination and lower caseload of COVID-19 infections. That is an advantage for the euro.”
“Resistance awaits at 1.1805, which was Friday's high, followed by 1.1825, 1.1860 and 1.1910. All were stepping stones on the way down.”
“Below the daily low of 1.1778, the next cushion is at 1.1770, where the 50 SMA hits the price. Further down, 1.1720 and 1.17 – the critical double bottom – await the bears.”
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