The EUR / USD pair is trading in a very narrow range today, holding close to the opening price level.
The US dollar remains strong amid growing hopes for a faster recovery in the US economy after the crisis. The American currency was supported by the data on retail sales for January published yesterday. Actual values significantly exceeded market forecasts and expectations. In January, retail sales increased by 5.3%, against the forecast of + 1.1%. The basic index of retail sales increased by 5.9%, against the forecast of + 1.0%.
There is no important news in the European economic calendar yet, therefore the EUR / USD pair is mainly influenced by the dollar. Later today, the minutes of the last meeting of the ECB on monetary policy will be published, but, as practice shows, these data are unlikely to have a significant impact on trading.
The market will focus on news from the US again today. The market continues to follow the debate over the new stimulus program. Recently Joe Biden met with trade unions to enlist their support before voting on a bill that provides for the allocation of 1.9 trillion dollars.
Also today in the US will be published data on building permits issued for January, weekly data on the labor market and indexes from the Federal Reserve Bank of Philadelphia for February. Each of these indicators can have a fairly significant local impact on trading.
The bearish signals still prevail on the chart. Within the day, we expect a correction to 1.2080 and a resumption of downward movement. Break of support at 1.2025 will open the way to 1.1960.
The main scenario is an increase to 1.2080 and a downward reversal.
An alternative scenario is a decline under 1.2025 from the current levels.
The current fundamental outlook is moderately negative. Shorts remain a priority with entry points on the price rollback to the level of 1.2080.
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