EUR/USD has recovered as US yields dropped off the highs but America's vaccination advantage, upcoming stimulus and bond auctions all point to fresh EUR/USD falls, FXStreet’s Analyst Yohay Elam reports.
“Congress is on the verge of approving President Joe Biden's massive $1.9 trillion coronavirus relief package, and the mere need to issue more debt is set to raise yields and the dollar. A bond auction due on Wednesday is highly anticipated.”
“In the old continent, updated growth figures for the fourth quarter will likely confirm the contraction of 0.6% previously reported. Prospect is not much better. European countries have vaccinated roughly 8% of their populations while the US is at 18% and accelerating. Italy's fresh COVID-19 wave is of specific worry.”
“The European Central Bank is capable of boosting the eurozone economies but seems unwilling or unable to ramp up support. The latest weekly bond-buying figures have shown a slowdown rather than a pick-up in support.”
“Support awaits at the new 2021 trough of 1.1836, followed by 1.1775 and 1.1730.”
“Resistance awaits at 1.1888, the daily high and roughly last week's low – a separator of ranges. It is followed by 1.1930 and 1.1950.”
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