EUR / USD ranges from 1.2120-45, but backed by a weakened US dollar

• The EUR / USD is in a range between 1.2125-1.2145, but is being supported by a weaker USD.
• While the USD is being undermined by the risk tone of the market, the euro continues to struggle amid the pessimism of the vaccine launch.

The EUR/USD has rebounded from session lows just below 1.2120 in recent trading, saved the weak US dollar, but has been unable to return to last week’s highs around 1.2150 or indeed highs of the session established at the beginning of the European session at 1.2140. On the day, the pair is trading with modest gains of around 20 pips or 0.15%.

The EUR / USD has apparently traded back in the 1.2125-1.2155 range from last Wednesday and Thursday. A more pronounced weakening of the US dollar (i.e., the dollar index falling back towards the January 21 lows, just above the 90.00 level) may be necessary for the pair to break above 1.2150, given the subdued appetite for the lower. euro right now. However, above 1.2150, the EUR / USD will find resistance in the form of a 50-day moving average at 1.2155.

USD under pressure

Safe-haven assets (such as JPY, USD, and US government bonds) are struggling on the first trading day of the week, despite the absence of Chinese and North American market participants, who celebrate the respective days holidays (Presidents’ Day in America and still halfway through the Lunar New Year celebrations in China). Global equity and crude oil markets have rebounded on optimism about the state of the global pandemic (the UK reached the crucial milestone of vaccinating its 15 million most vulnerable citizens and the US is experiencing a steady decline on infection rate while increasing your vaccination efforts).

The positive news about the pandemic comes against an already favorable backdrop of expectations of further US fiscal stimulus, continued support from the world central bank, and rapid global economic expansion that will begin later in the year, as the populations in key developed markets achieve herd immunity. Therefore, US equity index futures have been advancing to new all-time highs on Monday and US bond yields are also increasing, though, more importantly for the USD. , real returns are still low. For the increase in nominal returns to be bullish for the US dollar, it will have to be accompanied by an increase in real returns (which would make the USD a more attractive investment compared to other currencies).

Technical Levels