During the Asian trading session the EUR / USD pair showed an increase of more than 0.25% amid the weakening of the dollar across the entire spectrum of the market.
Today, the US dollar is trading down against all G7 currencies. The pressure on the American currency is exerted by expectations associated with the implementation of a new stimulus program in the United States, in the amount of 1.9 trillion dollars. Democrats this week have begun the process of passing the bill.
The statements of the FRS representatives also have a negative impact on the American currency. The head of the Federal Reserve Bank of Cleveland, Loretta Mester, and the head of the Federal Reserve Bank of Atlanta, Rafael Bostic, said that there is no need to roll back the measures to stimulate the economy.
Large-scale stimulus measures on the part of the government and a very soft policy of the FRS will further increase the pressure on the American currency.
Last night, the head of the ECB Christine Lagarde said that the EU economy may grow already this year, but the difficult epidemiological situation continues to put significant pressure on economic activity in the eurozone, increasing risks.
Today, the Bank of France gave a fairly optimistic forecast for economic recovery. The regulator said that despite the restrictions associated with COVID-19, the economy can still show 5% growth in 2021.
There is no important news in the economic calendar today. The main influence on trading will be provided by the dynamics of the movement of the debt securities market and investor sentiment on stock markets.
On the chart, the currency pair successfully broke through the resistance at 1.2050 yesterday and reached the next target at 1.2085. If buyers are able to break through this level today, the upward movement may continue to the level of 1.2135.
The main scenario is a rollback to 1.2050 and a resumption of upward movement.
Alternative scenario is a breakdown of the level of 1.2085 and growth to 1.2135 from current levels.
The current fundamental outlook is moderately positive. We consider longs on a pullback to the level of 1.2050.
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