EUR/USD has kicked off the week under 1.20 as US yields fall. Is the fifth attempt to break above 1.20 going to be different than the previous ones? Yohay Elam, an Analyst at FXStreet, lays out the bullish case.
Rising vaccination rates in Europe may boost the common currency
“The good news for the old continent is that the vaccination campaign has picked up and bottlenecks seem to have been removed. Nearly 25 doses have been given per person – or nearly 20% have received at least one shot. The EU will receive 50 million additional Pfizer/BioNTech doses in the second quarter and the issues with Johnson & Johnson's single-shot inoculations may be removed shortly. The faster vaccination rhythm is far from being priced into the euro.”
“Demand from the US consumer has ripple effects and may also boost the European economies. In the nearer term, such a ‘risk-on’ mood is positive for the currency pair.”
“One source of worry is the political impasse in Germany's ruling CDU/CSU bloc. Armin Laschet and Markus Söder have been clashing on who will replace Chancellor Angela Merkel as chancellor candidate. However, a quick resolution is likely as early as Monday.”
“Above the critical 1.20 level, the next levels to watch date to March and February, and include 1.2025, 1.2065 and 1.2115.”
“Support awaits at the daily low of 1.1945, followed by 1.1925 and 1.1860, which accompanied the pair during its recent ascent.”
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.