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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Plunged Euro 2021 0203
Gjallarhorn keeps the long position of the euro in the futures market and holds the loss.
The currency pair EUR/USD fell forming the Head-and-Shoulders pattern in the daily chart. The traders need to keep in mind, the price may retreat to 1.1925, 120 exponential moving average and 1.1874, support band in the daily chart. It is 1.1954 as of 04:00 (GMT).
The dollar's rally seems to be temporary. The main consensus in the market is still bearish dollar, and Gjallarhorn analyses euro to be bought after the rebound.
The dollar rose hitting two month high to 1.1956 Thursday. The Dollar index tracking dollar against the six major-currencies basket rose 0.46%% to 91.53.
As the market participants expected the U.S. economy would recover more quickly but Eurozone economy might fall into the double dip, the greenback hit the two month high. Euro plunged below 1.20 since last December.
The unemployment claims which was 770 thousands less than the market's expectation supported the U.S. dollar, too. The Wall Street forecasted 830-thousand increasing.
Yonhap Infomax reported, the expectation of U.S. fiscal stimulus package progress speeding up supported the dollar.
The House of Representative pass the stimulus package and it is expected the Senators process it in the week, too.
The materials of fiscal stimulus have supported euro since the pandemic. It remind us, the news of the agreement of the fiscal stimulus being failed while the meeting between President, Joe Biden and GOP senators supported the greenback.
Whatever the news, the dollar has rallied recently.
And Charles Evans, governor of Chicago Federal Bank said, hyper-easing monetary policy needed to be maintained while predicting that the economy will rebound rapidly this year.
The strategists look the risk of falling euro in the short term still remains due to the slow speed of the anti-COVID-19 vaccine injection, Yonhap Infomax reported.
And Bank of America said return to focus on fundamentals including relative rates in FX markets will likely support the dollar through the year amid a pick-up U.S. government bond yields, Investing.com reported.
But some analysts think the bullish greenback will be temporary. Investimg.com reported, this dollar's rally was nothing more than "noise" and would eventually fade as U.S. Treasury yields are set to run out of steam, citing Citi Bank's comment.
The Non-Farm Payrolls is released on Friday. It may lead the direction of euro in the short term.
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