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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Fluctuating EURO 2021 0213
cf. [EUR] Rebounding Euro 2021 0209
Gjallarhorn keeps the long position of the euro in the futures market.
The currency pair EUR/USD plunged in last New York session. Rising euro turned the trend suddenly and dived. The euro fell 0.16 percent to 1.2131 in the New York session. As Asian session begins, it keeps the downward momentum.
The pair failed to break through the downward trend line and dived from the upper band to the bottom band of Bollinger Bands in the four-hour chart. It has slid along the bottom band of Bollinger Bands.
The euro oscillates without a explicit trend around 20 Moving Average in the daily chart though the correction.
It seems to continue the correction and it is expected to rebound when Europe session begins.
The price of the pair is 1.2087 as of 01:31 (GMT).
The traders need to watch the euro whether it break through the bearish trend line clearly which shows the next step.
Dollar rose though the risk-on sentiment. It is analysed, the market participants think the global economy moves out of the deflation to the reflation. And the US Treasury yields surged due to the expectation of reflation.
The US 10-y Treasury yields rose to 1.2 percent and the yields of 30-y broke through 2.0 percent.
The market participants expect the fiscal stimulus package suggested by the U.S. President Joe Biden will pass without the adjustment and the U.S. economy recovers quickly.
The officials of Fed have confirmed the easing monetary policies supporting the expectation of economy recovery.
The German ZEW Economic Sentiment released yesterday hit 71.2. It was anticipated 59.7 and was 61.8 last month. It shows the recovery in Germany leading EU economy and it is positive to euro.
And the crude-oil price rose as the cold wave hit Texas. The WTI price exceeded 60 dollars.
Meanwhile, BD Swiss Group have thought the bearish dollar. The market continues the rally and Fed won't change its monetary policy, and a MUFG analyst expects, the greenback would be bearish for some weeks.
But the analysts at Danske Bank anticipated EUR/USD at 1.22 in the first quarter and looked for a decline to 1.16 in the year. Because the U.S. economy growth will be better than that in Euro zone, it make the euro down for a year.
EUR/USD thus faces structural decline due to a lack of competitiveness. A valuation reversal (lower EUR/USD) could come from rising US real rates, fading EU optimism, or Chinese slowdown, Danske Bank analysts have said.
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