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New restrictive measures in Germany restrain further growth of the EUR / USD pair

On Monday afternoon, the EUR / USD pair came under pressure after the German authorities decided to tighten quarantine measures due to the rapid increase in the number of cases of COVID-19. German Chancellor Angela Merkel stated that the measures taken earlier are not enough and the authorities intend to tighten quarantine measures from December 16.

 

Obviously, the new restrictions will increase the pressure on the economy. The pace of recovery will slow down very much and if the quarantine measures are prolonged, the largest EU economy may go down again. To support private companies, the authorities intend to allocate up to 11 billion euros per month.

 

Now the German media are writing that a large-scale vaccination program will be launched in the country in the near future. It is planned to vaccinate up to 3 million people. Separate vaccination centers are being built in some regions. Unlike the UK, Germany will use the AstraZeneca vaccine.

 

The US dollar is gradually recovering the positions it lost the day before. An active rise in the number of COVID-19 cases in many countries dramatically reduces optimism about the vaccine. Investors' interest in defensive assets is growing. The US dollar remains a safe haven asset.

 

There is no important news in the economic calendar today. Investors will focus on geopolitical news and the situation on the debt securities market.

 

On the chart we see another unsuccessful attempt to break through the resistance at 1.2165. At the same time, the price continues to hold close to this level. Breakdown is still possible. This scenario remains a priority.

 

  • Resistance levels: 1.2165, 1.2200, 1.2300.

 

  • Support levels: 1.2100, 1.2050, 1.2000.

 

The main scenario is a decline to 1.2100 and an increase to 1.2200.

 

An alternative scenario is growth to 1.2200 from current levels.

 

The current fundamental outlook is neutral. We consider longs from the level of 1.2100.

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