EUR/USD on the defensive as Biden considers $2 trillion stimulus package


  • EUR/USD trades at 1.2145 versus 1.2172 in early Asia. 
  • Prospects of bigger-than-expected US fiscal stimulus push Treasury yields and US dollar higher. 
  • President-elect Joe Biden is reportedly considering a $2 trillion stimulus plan.

EUR/USD is trading near crucial support at 1.2140, as the US dollar and Treasury yields are cheering reports that the US President-elect Joe Biden is considering a bigger-than-expected stimulus package. 

According to CNN, Biden is expected to unveil a Covid-19 relief package worth $2 trillion on Thursday. The stimulus price tag is bigger than the $750 billion fiscal stimulus plan projected by Goldman Sachs last week. Senator Chuck Schumer was reportedly pressing Biden for a spending package worth $1.3 trillion. 

Fiscal and monetary stimulus typically weakens the home currency. The dollar, however, is drawing bids on prospects of a bigger spending package. 

That's because Treasury yields, which have had more say in determining exchange rates of late, are rising in response to the stimulus news. The 10-year yield has added four basis points to trade near 1.11%.

The pair could continue to take cues from Treasury yields and Italy's political crisis. The shared currency ran into offers on Tuesday after Italy's former Prime Minister Matteo Renzi said he's pulling his party's ministers from the ruling coalition, putting the administration's future at risk amid the coronavirus pandemic, as noted by market observer Holger Zschapetiz. 

The minutes of the European Central Bank's latest policy meeting and the US weekly employment data scheduled for release later today could influence the currency pair. 

Technical levels

EUR/USD

Overview
Today last price 1.2145
Today Daily Change -0.0009
Today Daily Change % -0.07
Today daily open 1.2154
 
Trends
Daily SMA20 1.2226
Daily SMA50 1.2071
Daily SMA100 1.1924
Daily SMA200 1.1599
 
Levels
Previous Daily High 1.2223
Previous Daily Low 1.214
Previous Weekly High 1.235
Previous Weekly Low 1.2193
Previous Monthly High 1.231
Previous Monthly Low 1.1924
Daily Fibonacci 38.2% 1.2172
Daily Fibonacci 61.8% 1.2191
Daily Pivot Point S1 1.2122
Daily Pivot Point S2 1.209
Daily Pivot Point S3 1.2039
Daily Pivot Point R1 1.2205
Daily Pivot Point R2 1.2255
Daily Pivot Point R3 1.2288

 

 

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