EURO : Price Outlook
(Wed, 10 Feb 2021). EUR/USD has arrested its recent decline and turned higher, with the move driven by the current weakness in the US dollar. The pair traded as low as 1.1950 recently but EUR/USD is now back above 1.2100 and eyeing further gains. Coming up today, US inflation data (January) at 13:30 GMT, while later in the session, Fed Chair Jerome Powell’s speech will be closely followed for any update on the health of the US economy. This data release and Powell’s speech may well be the next short-term driver of the greenback. Initial resistance off the 50-day simple moving average at 1.21625 before a cluster off recent highs all the way back to 1.2192.
EUR/GBP is moving the other way and continues to slide lower on the back of renewed Sterling strength. The British Pound continues to pick-up a bid from the strong UK covid-19 vaccination program that now looks increasingly likely to beat the government’s target of 15 million vaccinations by February 15. In addition, the number of new cases and fatalities is falling sharply across the country, prompting more discussions about re-opening the economy.
The recent nine-month low at 0.87386 is tantalisingly close and looks likely to fall in the short-term. Below here there is an old swing low at 0.86710made at the end of April last year before the chart opens up to sub-0.8600 price action. The pair look mildly oversold, using the CCI indicator, but this is unlikely to stem any move lower.
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