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EUR/USD has been extending its decline as upbeat US data and stimulus hopes boost Treasury yields. Further developments in Washington, US jobless claims and vaccine developments are eyed while Thursday’s 4-hour chart is pointing to further losses, FXStreet’s Analyst Yohay Elam briefs.

Key quotes

“While the White House has been signaling it is willing to compromise with the GOP, markets are beginning to price in a larger boost to the economy than beforehand. A plan worth roughly $1.3 trillion seems possible. Better growth prospects and high debt issuance push funds away from bonds and the resulting higher yields make the greenback more attractive.”

“ADP’s private-sector job statistics pointed to an increase of 174,000 positions in January, while the ISM Services Purchasing Managers’ Index advanced to 58.7 points. Both beat estimates and raise expectations for Friday’s Nonfarm Payrolls. Weekly jobless claims are also forecast to show improvement.”

“America’s accelerated vaccination campaign also provides hope for a rapid exit from the crisis, while Europe continues lagging behind following several debacles. Euro bulls may find some solace in AstraZeneca’s intention to send doses over the weekend, allowing some places to reignite paused campaigns.” 

“The psychologically significant 1.20 level has been breached. The next line to watch is 1.1960, which provided some support in early December 2020. It is followed by 1.1930, a swing low around that time, and then by 1.1890 and 1.1850, already dating back to November.” 

“Looking up, the former support line of 1.2050 is strong resistance. Further above, 1.2090, 1.2130, 1.2155 and 1.2190 would cap any upside movement.”