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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Fluctuating Euro above 1.21 2020 1209
cf. [EUR] EUR, Preparing to Exceed 1.20 2020 1129
Gjallarhorn has liquidated the long positions of euro-futures in CME, Chicago Mercantile Exchange, and doesn't have any position just watching the market.
One of the major currency pair EUR/USD began this week fluctuating between 1.212x and 217x.
The pair just moves up and down without the explicit trend after it broke through the main bearish trend line which was formed since 2008.
Euro failed to gain the momentum of rising more after the surging in the last month, though Dollar Index which tracking the greenback against six major currencies basket fell 0.30 percent to 90.429 on Tuesday. The dollar Index fell to lowest level in two and a half year.
The market participants expected the additional fiscal stimulus, the optimism of the talk between England and EU after the Brexit and the vaccine injection soon, and it took euro to rise in the channel. The positive news against the pandemic supports the risk-on assets.
Senator McConnell hinted the deal might be agreed in the year.
It made the greenback's retreat and euro's rising, it added.
DowJones reported on Monday, the analysts in JP Morgan thought the investors believed the euro would rise.
And the analysts thought euro might lose its popularity due to the ECB's policy. Yonhap Infomax reported citing DowJones.
The European Central Bank, ECB spoke the hyper-easing monetary policy would be extended at least to March, 2022.
And it revised to buy the bonds 50 billion euro more via PPP, purchasing program against the pandemic. A strategist told that ECB might restrain the rising of euro and euro would fall to 1.20s.
But Commerzbank think the pair is supported by the U.S. inflation expectation which is higher than that in euro zone. The euro rises due to the inflation difference between the United States and euro zone while Fed and ECB hold the zero interest rate respectively, Yonhap Infomax reported citing DowJones.
Meanwhile the U.S. FOMC meeting is held on December 17. The market participants expect the more market-friendly policy of FOMC but lower their expectation of the US fiscal stimulus in the year.
It is still valid to keep the long bias to euro, buying euro, though euro hovers in the sidling channel. And it is recommended that buying euro as it is in the correction.
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