The EUR / USD pair is trading in different directions today, but the price is holding near the new highs set recently.
The main driver of the growth of the currency pair is the dynamics of the movement of the dollar index, which has been actively decreasing over the past two months. In recent weeks, the pressure on the American currency has been exerted by expectations associated with the strengthening of stimulus measures in the United States with the coming to power of Joe Biden. As a result of the second round of the Senate elections held in Georgia, representatives of the Democratic Party won. This means that both houses of Congress will be controlled by Democrats in the coming years. Biden's headquarters will be able to implement its legislative initiatives almost without hindrance, including those aimed at expanding the program to support the economy affected by COVID-19.
The news about the difficult epidemiological situation in the EU countries continues to have a restraining effect on the EUR / USD pair. The authorities in Germany, Italy and other countries intend to extend the restrictive measures to curb the spread of the virus. Tough quarantine measures increase risks for the development of the EU economy. But, recently, in an interview with the ZDF TV channel, German Finance Minister Olaf Scholz said that the EU economy will be able to withstand a long period of restrictions. According to Scholz, the consequences for the economy will not be as significant as after the 2008 crisis.
Today, in the EU economic calendar, it is worth paying attention to the publication of data on the consumer price index for December and the ECB's statement on monetary policy.
In the US, the focus will be on weekly labor market data and ISM data on the purchasing managers' index for the US non-manufacturing sector.
On the chart, we mark a slowdown in the rate of development of the upward movement. The bears are trying to bring the price back below the 1.2300 level. If they succeed, then in the short term we can see the development of a pullback movement in the direction of levels 1.2240 and 1.2160.
The main scenario is a rollback to 1.2140 and a renewed upward movement.
Alternative scenario is growth to 1.2385 from the current levels.
The current fundamental outlook is neutral. We consider longs when the price rolls back to the 1.2240 mark.
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