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EUR/USD: Three factors point to the downside

EUR/USD is off the highs as the Fed has begun mulling withdrawing stimulus ahead of US Retail Sales. Yohay Elam, an Analyst at FXStreet, highlights three factors pointing to EUR/USD falls.

Vaccine delays in Europe continue weighing on the common currency  

“Jerome Powell, Chair of the Federal Reserve, said that the bank would first taper down its bond-buying scheme before raising interest rates, something markets had already anticipated. These Fed comments have come ahead of the all-important release of US Retail Sales statistics for March. After a drop in February, the economic calendar is pointing to a leap of over 5% – and some even expect to double that figure. A surge may boost the dollar.”  

“While the EU announced it would receive 50 million additional doses of Pfizer’s COVID-19 vaccines in the second quarter, immunization uncertainty remains substantial. The longer health concerns linger, the greater vaccine hesitancy may expand. The current supply issue may turn into a demand one.”  

“The 4-hour chart is showing that EUR/USD is in an uptrend since late March, but it faces issues at the triple-top of 1.1990. The Relative Strength Index is at around 70 – flirting with overbought conditions. That hints a downside correction is coming.”

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