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The dollar increases pressure on EUR / USD

The EUR / USD pair is declining on Tuesday amid the strengthening of the dollar across the entire spectrum of the market.

 

The US currency is supported by the growing yield of debt securities. The 10-year bond yield is approaching 1.7% (five-day high). Apparently, after encouraging comments from FRS officials and positive macroeconomic statistics, investors are again betting on the acceleration of the US economic recovery and inflation. In the long term, this may affect the Fed's policy, despite the fact that the regulator is not yet ready to discuss the issue of a possible tightening of monetary policy.

 

Jerome Powell is due to speak at an event hosted by the Washington Economic Club tomorrow. Investors will expect him to react to the latest macroeconomic data.

 

Today, all the market's attention will be focused on the publication of March CPI data. The growth of indicators can strengthen the position of the dollar in the foreign exchange market.

 

There is still little positive news in Europe. Yesterday, the German Chancellor announced that the third wave of the COVID-19 pandemic could be the most severe. The incidence rate remains high, so the authorities do not intend to ease quarantine restrictions yet. 

 

Following this, the German Association of Industrialists lowered its forecast for Germany's GDP for 2021 from 3.5% to 3.0%.

 

ZEW indexes for April will be released later today. Experts predict the growth of the main indices.

 

The chart is developing sideways in the range of 1.1860-1.1930. Today, we consider a scenario with a price decrease to the lower border of the range as a priority. Perhaps we will see attempts to break through the level of 1.1860.

 

  • Resistance levels: 1.1930, 1.1990, 1.2050.

 

  • Support levels: 1.1865, 1.1830, 1.1800.

 

The main scenario is a decline below 1.1860

 

An alternative scenario is a breakdown of the resistance at 1.1930 and growth in the direction of 1.1990.

 

The current fundamental background is moderately negative. We consider shorts from the level of 1.1900.

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