The EUR / USD pair for the first time since the end of April 2018 climbed above the 1.22 mark. Several important factors are currently supporting the currency pair.
Firstly, the US dollar was under strong pressure. On the program passed yesterday, the US Federal Reserve expressed its desire to keep interest rates at the current level until the end of 2023 and continue the buyback program in the same volumes until the targets for employment and inflation are reached. In the near future, the active stimulating policy of the FRS can be supplemented with financial and budgetary financing. Today, Democratic and Republican representatives announced substantial progress in negotiations that are nearing completion. The new stimulus package is expected to amount to $ 900 billion. Also, legislators are close to agreeing on a budget for the new fiscal year in the amount of 1.4 trillion dollars.
It is obvious that large-scale infusions from the Fed and the government will increase the pressure on the US currency both in the long term and in the long term.
Secondly, strong support this week was provided by news from Europe. Recently released very strong preliminary PMI data for manufacturing and services for the EU as a whole, and for the countries of the community. The data indicate economic recovery despite tightening quarantine measures in many European countries. More good news for the euro came from Brussels. The head of the European Commission Ursula der Leyen announced yesterday that the UK and the EU are closer to reaching an agreement on Brexit. At the same time, von der Leyen noted that the progress achieved so far does not guarantee the achievement of a final agreement.
The combined influence of all these factors ensured a steady growth of the EUR / USD currency pair, which may continue today.
In the economic calendar today it is worth paying attention to the data on the consumer price index for November in the EU and a large block of statistics from the United States (the number of building permits issued, weekly data on the labor market and the index of manufacturing activity from the Federal Reserve Bank of Philadelphia).
A breakdown of resistance at 1.2165 occurred on the chart. The currency pair as expected rose above 1.2200. At the same time, there are no reversal signals on the chart yet, therefore, the growth of the currency pair may continue in the coming days. The long-term target for the bulls is the level 1.2385. Medium-term means the level of 1.2300.
The main scenario is growth in the direction of 1.2300 from the current levels.
An alternative scenario is a rollback to 1.2195 and renewed upward movement.
The current fundamental outlook is positive. We consider longs from the level of 1.2195.
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