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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Retreated Euro 2021 0218
cf. [EUR] Euro in the Correction 2021 0217
cf. [EUR] Fluctuating EURO 2021 0213
cf. [EUR] Rebounding Euro 2021 0209
Gjallarhorn keeps the long position of the euro in the futures market, CME.
The currency pair EUR/USD succeeded to rebound on 1.2090 breaking through the downward trend line.
The 120 exponential moving average and 20 moving average in the four-hour chart has supported the euro, helping its rally.
If it continues to rally, the traders need to watch whether it reaches to 1.2348, the peak in the year. And if it is under the correction, it could be supported on 1.2120s.
The rising anticipation of the global reflation and the better record than expectation in EU supported the euro. The bond yields in the U.S. rose due to the expectation of passing the bill of the massive fiscal stimulus and the rising vaccination against COVID-19.
The Dollar Index tracking the dollar against the major six-currencies' basket dropped 0.25 percent to 90.118.
The markets expect the U.S. fiscal stimulus package will be passed in the week, after Nancy Pelosi, the Speaker of the House said the package would be passed in the House.
The German Ifo Business Climate helped the currency pair's rally on Monday. It hit 92.4 better than the market expectation 90.5 and the previous record 90.3. The German Ifo Business Climate is one of the important economy index in Europe.
Forex strategist Izumi Yukio at Daiwa Securities analyzed the commodity currencies and the British pound rose against the dollar and this trend seemed to continue, Yonhap Infomax reported.
But the outlook of euro is not clear. Strategist, Ulrich Leutmann at Commerzbank said, the difference of the economy growth between EU and the U.S. and it is negative to euro. He added the trend of EUR/USD in the mid term is determined by whether the U.S economy enters the Goldilocks after the strong lockdown and the euro may be bearish.
Joel Frank at FXStreet.com said that with the Eurozone’s vaccine rollout lagging, meaning that its post-Covid-19 economic rebound is likely to be postponed, and the prospects for any meaningful pick up in long-term inflation much milder than in the US, EUR underperformance over these past few weeks is perhaps unsurprising and seems likely to continue. That does not mean that the rug might not be pulled from beneath the US dollar and for it to resume its long-term downtrend that had been in play for much of 2020. If that was to be the case, even though the euro wouldn’t be the prime G10 candidate to benefit from this, EUR/USD would likely head back towards cycle highs.
ECB President Christine Lagarde’s comments that the ECB is closely monitoring the evolution of longer-term nominal bond yields did not lead to much reaction in the euro. The idea that Lagarde’s ECB would take a hands-on approach towards the management of bond yields is nothing new.
And Azeez M. Mustapha at cryptovibes.com said the currency pair had returned to the bullish in the long term.
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