The EUR/USD pair closed at 1.20622, after placing a high of 1.21130, and a low of 1.20426. Despite stronger-than-expected macroeconomic data from Europe, the EUR/USD pair posted losses on Wednesday, amid the broad-based strength in the US dollar. The US dollar was high, amid the growing optimism that the country’s ramped-up vaccination program will lead to a prompt and robust economic recovery. On Tuesday, US President Joe Biden announced that the US would have sufficient coronavirus vaccines to immunize every adult in the country by the end of May, which would be two months ahead of schedule.
These developments were followed by the pharmaceutical company Merck agreeing to help its rival Johnson & Johnson to speed up the production of its single-shot vaccine. The vaccine program is now one of the key factors in bringing the economy back to recovery. Texas, which is the second biggest US state by population, has already announced that it will lift the mask restrictions and fully reopen businesses by next week. Furthermore, the US stimulus package was also approved by the US House of Representatives. This will add $ 1.9 trillion to the coronavirus relief aid, which will support the economic growth on the path to recovery. All these positive developments in the US added strength to the US dollar, also investing in the US bond yields and weighing on the EUR/USD pair.
On the data front, at 12:45 GMT, the French Gov. Budget Balance came in, showing a deficit of -21.9B for January. At 13:15 GMT, the Spanish Services PMI was released, remaining flat with the expectations of 43.1. At 13:45 GMT, the Italian Services PMI indicated a rise to 48.8, against the expected 45.8, supporting the Euro and capping any further losses in the
EUR/USD pair. At 13:50 GMT, the French Final Services PMI was released, showing a rise to 45.6, against the expected 43.6, supporting the Euro and limiting the downside momentum of the
EUR/USD pair. At 13:55 GMT, the German Final Services PMI came in, remaining in line with the forecast of 45.7. At 14:00 GMT, the Final Services PMI figures for the entire Eurozone came in at 45.7, against the expected 44.7, supporting the Euro and capping any further losses in the
EUR/USD pair. At 15:00 GMT, the PPI for January was released, showing a rise to 1.4%, against the expected 1.3%, which supported the Euro and limited the downfall in the
EUR/USD prices.
From the US side, at 18:15 GMT, the ADP Non-Farm Employment Change for February was released, showing a decline to 117K, against the forecast of 203K, which weighed on the US dollar and capped any further downside in the
EUR/USD pair. At 19:45 GMT, the Final Services PMI for February rose to 59.8, against the projected 58.9, which supported the US dollar and added to the losses in the
EUR/USD pair. At 20:00 GMT, the ISM Services PMI dropped to 55.3, against the projected 58.7, weighing on the US dollar and capping any further losses in the EUR/USD pair.
Meanwhile, the single currency Euro came under pressure as the outlook of the European economy remained shaky, due to many European nations turning towards other nations outside of Europe to boost the vaccine supplies.On Monday, Austrian Chancellor Sebastian Kurz said that he intended to work with Israel and Denmark on future vaccine production. He has been sharply critical of the European Union’s strategy and bloc regulator, the European Medicine Agency (EMA), because the EU authorization of the Pfizer & BioNTech vaccine in late December came weeks after the UK and the US had approved it. The Danish Prime Minister also made similar comments, saying that the European efforts in terms of vaccines could no longer stand alone, which explains why Denmark and Austria are cooperating to obtain more doses.
Other EU nations have called on Russia and China to fill in the gaps in vaccine supply, and Slovakia has granted emergency authorization for Moscow’s Sputnik vaccine, on the back of delays in supply from Pfizer and AstraZeneca. The EU member states have lost confidence in the European Union’s vaccine strategy, which is weighing on the Euro and ultimately adding to the losses in the EUR/USD pair.
Daily Technical Levels
Support Resistance
1.2021 1.2125
1.1954 1.2162
1.1917 1.2229
Pivot Point: 1.2058The
EUR/USD is trading at the 1.2055 mark, having violated the support area of 1.2094, which is now working as resistance for the EUR/USD pair. At the moment, the EUR/USD may find support at 1.2042, and a bearish breakout at this level could drive more selling in the EUR/USD, until the 1.998 level. Good luck!
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