EUR/USD: Three reasons to suspect a correction is coming
|EUR/USD has been rising thanks to dollar weakness, but the Fed's Powell may change that. Furthermore, Europe's depressing covid situation may return to weighing on the euro while Wednesday's 4-hour chart is pointing to overbought conditions, FXStreet’s Analyst Yohay Elam reports.
Key quotes
“Jerome Powell, Chairman of the Federal Reserve, is set to deliver a speech on the labor market later in the day. The powerful central banker may use his public appearance to urge lawmakers to act. Investors may respond to such a reminder by selling bonds in expectations of higher debt issuance, boosting the dollar.”
“The EU aims to vaccinate 70% of adults through the summer – a goal that looks elusive with every day that passes and immunization figures only slowly climb. Deliveries of doses are scheduled to arrive in the old continent during February, but the quantities are low and distribution sluggish.”
“The Relative Strength Index is just above 70 – in overbought territory. This development indicates a correction. Support awaits at 1.2095, which is where the 100 SMA hits the price. It is followed by 1.2050, a robust separator of ranges. Resistance awaits at 1.2145, where the 200 SMA awaits the pair, followed by 1.2190, a stubborn cap from mid-January.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.