EUR/USD Trades Hit Take Profit – Brace for another Sell!
Arslan Butt • 3 min read
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.
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.
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!
About the author
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.