EUR/USD: Weak US data to trigger a leg higher
|EUR/USD has been rising after Fed Chair Powell cheered investors by pledging support. Higher yields on Treasuries support the dollar, but US data could disappoint and push it lower, Yohay Elam, an Analyst at FXStreet, reports.
Key quotes
“The Fed's commitment to keeping rates low has boosted sentiment and that is also weighing on the dollar, despite the rise in US yields. Returns on ten-year Treasuries have hit 1.44%, a one-year high – yet the dollar fails to gain ground.”
“Economists expect the second release of Gross Domestic Product to show an upgrade to fourth-quarter growth from 4% to 4.1% annualized. Durable Goods Orders statistics for January are set to continue rising, and even accelerate, reflecting robust investment. Weekly jobless claims data for the week ending February 22 are also predicted to improve and drop from the highs of 838,000. Are all these estimates too high? That would push the dollar down.”
“Investors seem to have already priced in a delay in AstraZeneca's delivery of vaccines to the EU and focus on the upbeat sentiment. EU leaders hold a conference on Thursday and are unlikely to touch on any economic figures, but rather discuss green passports.”
“Resistance awaits at 1.225, which was a peak in mid-January. It is followed by 1.2280, a swing high early in the year, ahead of 1.2310 and 1.2350. Support awaits at the 1.2190 level mentioned earlier, followed by 1.2170 and 1.2130.”
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