EUR/USD has been struggling as France enters a lockdown and covid rages through all of Europe. According to FXStreet’s Analyst Yohay Elam, US data and reactions to Biden’s infrastructure plan may boost the dollar.
See: EUR/USD to tank towards 1.16 as Europe set to maintain tighter restrictions for longer – MUFG
Euro bears are not taken for a ride on April Fool’s Day
“Coronavirus cases continue rising in the old continent and the threat of overwhelming France’s health system caused President Emmanuel Macron to impose a month-long lockdown. His move joins Italy, Germany and other countries.”
“US President Joe Biden presented his massive $2.25 trillion infrastructure spending plan along with a funding scheme – tax hikes are coming. While higher rates for corporates may weigh on Wall Street, it means less debt issuance, which is positive for bonds. The resulting drop in yields weighs on the greenback.”
“Two critical data points are eyed on Thursday, and they may push the dollar higher. First, weekly jobless claims are set to continue falling, after hitting 684,000 last week – the lowest since the pandemic. Secondly, the ISM Manufacturing Purchasing Managers’ Index for March is set to extend its gains above 60 – reflecting the rapid growth in America’s industrial sector.”
“The round 1.17 level provided support earlier this week and remains critical support. It is followed by 1.1630, 1.16 and 1.1550, all dating back to the autumn of last year.”
“Some resistance awaits at 1.1745, the daily high, with the more substantial cap looming at 1.1760. The next levels to watch are 1.1805 and 1.1836.”