EUR/USD: The greenback lifts its head again, 1.2125 critical support at risk


The greenback comeback is alive and kicking. The EUR/USD pair has already dropped some 60 pips from the peak of 1.2222, and more may be in store. A US bond auction and Fed speakers hold the key to the next moves, Yohay Elam, an Analyst at FXStreet, reports.

See – EUR/USD to peak around 1.25-1.27 during the first half of 2021 – Nordea

Key quotes

“The US currency dived on Tuesday after investors rushed to buy ten-year Treasuries. The consequent fall in yields triggered the downfall – making Wednesday's 30-year auction more important than usual. High demand could weigh on the greenback, but long-term debt could attract less enthusiasm.” 

“Federal Reserve Governor Lael Brainard and Vice-Chairman Richard Claudia will both speak later in the day. If they mention tapering – even by denying it – the dollar has room to advance. Fewer dollars printed mean higher yields and a stronger dollar.”

“Two weeks before the Fed announces its rate decision, it publishes a document consisting of anecdotal reports from its regions. If the report – usually a low key event – includes optimism about fiscal stimulus and the vaccine, it would also boost the greenback.”

“Critical support awaits at 1.2125 – the triple-bottom initially tackled in mid-December and tackled in recent days. There are several support lines below, but these are weaker – 1.21, 1.2075, 1.2160 and 1.2040.” 

“Some resistance awaits at 1.2180, which temporarily capped EUR/USD on Tuesday. It is followed by 1.2222, the recent high, followed by 1.2240, which provided support last week.”

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 

EUR/USD News

GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 

GBP/USD News

Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures