- EUR / USD struggles for direction around the 1.18 zone.
- The dollar remains on the positive path and reaches highs in 2021.
- Final US fourth quarter GDP stood at 4.3% QoQ, beating consensus.
The single currency remains well on the defensive and drags the EUR/USD to new yearly lows at levels below 1.1800 on Thursday.
EUR / USD in 4 month lows
EUR / USD extends the leg down to levels below the 1.1800 criterion for the first time since November 2020 thanks to the dollar’s relentless bullish momentum.
Indeed, prospects for a robust recovery in Europe now appear dim, as investors continue to adjust to the possibility of another wave of the pandemic combined with increased lockdown restrictions in several countries.
Earlier in the session, German consumer confidence followed by GfK improved to -6.2 for the month of April, while business confidence in France was unchanged at 98 for the current month. The ECB’s results showed that the M3 money supply expanded by 13.3% year-on-year until January, beating forecasts, while loans to the private sector increased by 3.0% compared to the previous year.
In the US, final fourth-quarter GDP figures noted that the economy expanded 4.3% quarter-on-quarter and initial claims increased by 684,000 on a weekly basis over the past week.
What to look for around EUR
EUR / USD remains under heavy pressure and tests the 1.1800 zone amid mounting bullish pressure around the dollar. In fact, the persistent strong performance of the dollar has been undermining the pair’s constructive outlook in recent weeks, as market participants continue to adjust to higher US returns, the superior performance of the US economy. .UU. (Against its G10 peers) and the deterioration of morale in the euro zone. However, the ECB’s steady hand (despite some verbal concerns) in combination with the expected rebound in economic activity in the region in the post-pandemic stage will likely prevent a much deeper pullback in the pair.
Technical levels
At the moment, the index is losing 0.13% at 1.1796 and faces the next support at 1.1791 (March 25 low) seconded by 1.1762 (78.6% Fibonacci from the November-January rally) and finally 1.1602 (March 4 monthly low). of November). On the other hand, a breakout of 1.1989 (March 11 high) would target 1.2000 (psychological level) en route to 1.2038 (50 SMA).
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