Today we shall take a look at the EUR/USD currency pair. Last week we observed a decline in the exchange rate of this pair to lows last seen in early November 2020, but with some choppy trading at the very end of the week, the trend has now become mixed.
The euro opened up the second quarter of 2021 at a loss. The eurozone’s financial struggles continue thanks to the European Union’s failure to contain the coronavirus pandemic. Despite months of criticism over the slow pace of Covid-19 vaccinations, European countries have not done much to improve on that front and are currently experiencing a third wave of infections. More lockdowns are in store for the near future, adding further strain on the bloc’s economy. Investors will most likely not trust most fundamentals coming out of the bloc at the moment because they will not reflect the impact of the current lockdowns.
The situation remains the opposite with the US dollar. The United States under Biden’s leadership has taken great strides in combating the pandemic, even as infections are on the rise in North America as well. Between 18 and 34% of all adult Americans have received at least one dose, and around 18% of the population has been fully vaccinated against Covid-19. While these efforts continue, Biden’s administration is also getting ready for a tough fight over the President’s American Jobs Plan, which can also add a significant boost to the economy, if it is approved by Congress. Fundamentals are also showing the US economy is recovering, as indicated most recently by the NFPs, which exceeded expectations by a lot. Thus, the dollar will remain strong for a while yet.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1764, with the price currently trading below it. The daily support levels lie at 1.1751 and 1.1747. The daily resistances are located at 1.1773 and 1.1777. The indicators of technical analysis agree in strongly recommending a sell position today.
