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  • Broad-based US dollar weakness powers EUR/USD above the 200-hour SMA. 
  • Stimulus expectations continue to weigh over the greenback.

EUR/USD looks north, as the US dollar extends the post-payrolls losses on stimulus expectations. 

The pair crossed above the 200-hour Simple Moving Average (SMA) in Asia and now trades near 1.2080, representing a nearly 0.30% gain on the day. The SMA is located at 1.2056 at press time. 

Since Friday’s weak Nonfarm Payrolls data, the dollar has been losing ground. The dismal data pointed to slower-than-expected economic recovery crystallized support for President Joe Biden’s fiscal stimulus plan worth $1.9 trillion. 

According to BK Asset Management’s Kathy Lien, the House is likely to pass the stimulus plan over the next two weeks, and Biden is hoping to have Senate approval and final signing by March 15. Lien noted in her daily analysis that a $1,400 stimulus check appears to be a done deal. 

The impending stimulus is bearish for the dollar as it often leads to higher spending, boosting the deficit. The market looks to be pricing that in advance by selling the dollar. 

However, the dollar may find bids if the stock markets witness a “sell the fact” trade, as discussed Monday. Data-wise, the focus will be on the German Trade Balance, due at 07:00 GMT, and US JOLTS Job Openings, scheduled at 15:00 GMT. The pair could also take cues from ECB’s Lane speech and the action in the Eurozone bond markets, where the spread between the 10-year Italian and German bond yields is falling on fading political uncertainty. 

  • EUR/USD Price Analysis: Teasing inverse H&S breakout on the hourly chart

Technical levels