EUR/USD has dropped sharply after the Fed's Powell refused to commit to lowering yields, punching the euro to the critical 1.1950 support. America's Nonfarm Payrolls report for February is set to push the pair over the line, Yohay Elam, an Analyst at FXStreet, reports.
See: EUR/USD to strengthen with vaccine rollout in the second quarter – CIBC
Key quotes
“Federal Reserve Chair Jerome Powell has said that rising US bond yields ‘caught my attention’, triggering a market selloff and a dollar bull run.”
“February's Nonfarm Payrolls report is pointing to an increase of 182,000 jobs in the world's largest economy, a relatively modest pace – which could be lower according to leading indicators.”
“On the medical front, America has hit a pace of two million inoculations per day, increasing the bringing forward the timeline for exiting the crisis. In Congress, Senate Republicans have slowed the process of approving the new version of President Joe Biden's covid relief package by forcing clerks to read it out loud. However, Democrats have united around a modified version and are set to turn the bill into law sometime next week.”
“Euro/dollar is trading close to the critical 1.1950 trough – and has been forming a double-bottom there. It last hit that level in early February, a line which serves as the 2021 trough.”
“Below 1.1950, further support awaits at 1.1930, followed by 1.1880 and 1.1850 – which all played a role in December 2020.”
“Resistance awaits at 1.1990, which was a swing low earlier in the week, and then by 1.2020, a bottom recorded in late February.”
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