EUR/USD has been failing to take advantage of the upbeat market mood and advance. The critical 1.2050 triple-bottom looks vulnerable after the dead-cat bounce as concerns about eurozone growth, vaccine supplies or US stimulus may spark a sell-off, according to FXStreet’s Analyst Yohay Elam.
“US President Joe Biden has met a group of ten Republican senators who laid down a stimulus proposal worth around $600 billion. Both sides described the meeting as productive, a positive development. Will markets see $600 billion as insufficient? Perhaps, and Democrats may still decide to go it alone without Republican support. Nevertheless, markets are happy with prospects of progress.”
“A reason to be cheerful is America's rapid vaccination campaign – which has picked up speed in recent days – and compounds a decline in COVID-19 cases and especially hospitalizations. If America's engine returns to full capacity sooner, the entire world benefits.”
“The euro may find solace in the fact that the European Union has climbed down the tree in its clash with AstraZeneca, with both sides agreeing to a compromise. Moreover, Pfizer promised more jabs. Nevertheless, the old continent's immunization attempt is extremely lengthy. Another delay in Europe's vaccination campaign and the common currency could be knocked lower.”
“Eurozone Gross Domestic Product figures for the last quarter of 2020 may add pressure. The economic calendar is pointing to a decline in output after the third quarter's rapid recovery, and there are growing fears of a double-dip recession.”
“Critical support awaits at 1.2050, which is a triple-bottom – and the lowest level in 2021. Losing it would send the pair to the lowest in two months. The next levels to watch are 1.20 and 1.1960. Some resistance is at the daily high of 1.2090, followed by 1.2140, which is the convergence of the 50 and 100 SMAs.”
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.