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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Rebounding EURO 2021 0225
Gjallarhorn liquidated the long postion of euro as the price dropped to the stop order.
The currency pair EUR/USD fell sharply after touching 1.22424. It dropped below the 120 exponential moving average on the four-hour chart and the diving momentum seems to be powerful. The Fibonacci which is formed from last November shows the euro has retreated just 23.6 percent, it still support the bullish trend to euro.
But it is anticipated euro may fall to the bottom band of Bollinger Band on the daily chart and to 1.1970 on which the 120 EMA lies on the daily chart.
Though the correction, the long bias to euro is still valid. It may be a good time to buy euro when this correction is completed.
Unlike the fallen euro, the U.S. dollar surged due to the rising U.S. Treasury yields. Fed Chair Jerome Powell spoke the dovish statement while the testifying, the 10-y yields reached 1.50 percent though. It reflects the concern about the inflation.
Jerome Powell, Fed Chair testified the dovish stance while his testifying the continuous easing policy in the Senate and the House of Representatives respectively. He said, the low interest rate and the massive purchase of the asset would be kept till the economy recovers more.
He predicted three years at least in which the inflation reached Fed's goal.
The reflation betting on the Forex market lowered the dollar boosting the euro. The euro could reach above 1.2240.
As the U.S. Treasury 10-year yield surged above 1.50 percent at once and the concern about the inflation possibility rose, the dollar rallied.
Meanwhile the preliminary GDP released on Thursday was 4.1 percent growth, worse than the market expectation 4.2 percent, and the U.S. unemployment claims recorded 730 thousands. The markets expect 828 thousands and it was 861 thousands in the previous week.
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