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The EUR/USD pair kick-started 2021 reaching a fresh multi-year high of 1.2349, as optimism continued to undermine the greenback. Although the dollar got to recover some ground ahead of the weekly close, the greenback retains its intrinsic long-term weakness, as its latest advance seems a mere correction, FXStreet’s Chief Analyst Valeria Bednarik briefs.

Key quotes

“Coronavirus immunization through different approved vaccines has seen a bumpy start in December, but it’s in progress. Optimism is being partially overshadowed by record cases in the US and some European countries, which resulted in more restrictive measures. In that sense, things didn’t change with the new year, and would likely remain the same over the next couple of months.”

“It seems the EUR/USD pair is in a corrective decline that may continue in the nearest-term, although nothing is indicating an upcoming bearish case.”

“A steeper decline may come if EUR/USD breaks below 1.2129, the low from December 21. The next relevant support is the 1.2000 figure, and the pair would need quite a catalyst to break below it. The first resistance is 1.2413, April 2018 high, followed by the 2018 high of 1.2554.”