The recent 70-pip upward move in EUR/USD has left many traders perplexed amid growing uncertainty on several fronts. The pair needs at least one dose of optimism about US stimulus, upbeat data or an accelerated vaccine campaign to grind higher, FXStreet’s Analyst Yohay Elam reports.
Key quotes
“Friday’s spotlight is on Markit’s preliminary Purchasing Managers’ Indexes for February. In the old continent, these forward-looking surveys are set to show an ongoing divide between the struggling services sectors – hit by lockdowns – and the humming manufacturing ones. Are managers seeing through the current suffering and into a vaccine-led recovery? That could boost the euro.”
“On the other side of the pond, Markit’s US PMIs are projected to show robust activity, and that may improve the mood. If US data is rosy, it could cause Treasury yields to rise and boost the dollar. However, if the statistics are only cautiously optimistic, it would lift sentiment while allowing the safe-haven dollar to decline.”
“Congress is gearing up to vote on as much as $1.9 trillion in aid late next week. Any delay may weigh on markets while positive developments may boost them. Moreover, there are initial reports that the White House is already mulling a second fiscal stimulus focused on infrastructure and worth some $3 trillion. Details on such spending would also be positive.”
“European countries are finally receiving more doses of various jabs, but reports suggest that some are hesitating to take the AstraZeneca shots. Nevertheless, Astra’s vaccines are widely deployed in the UK and if the continent accepts these doses at a faster pace, the euro may rise.”
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