- EUR / USD extends Tuesday’s losses and revisits the 1.2060 region.
- The rebound of the dollar weighs on the pair.
- US retail sales and FOMC minutes stand out on today’s economic calendar.
The common currency extends the sales pitch and drags EUR / USD to new weekly lows near 1.2060 region.
EUR / USD backs down on USD strength ahead of data
The EUR / USD loses ground for the second day in a row on Wednesday and revisits the multi-day lows around the 1.2060 level.
The sudden improvement in sentiment around the US dollar has forced the EUR / USD pair back from Tuesday’s weekly highs around 1.2170, as investors favored the dollar amid the rally in 10-year US Treasury yields. at levels last seen a year ago well above 1.30%.
Meanwhile, reflation trading and vaccine optimism, along with the strong global economic rebound expected in the second half of the year, remain the sole driver of pair price action, as well as other appetite sentiment. for the risk.
Regarding economic data, today highlights the publication of the US retail sales report and the minutes of the FOMC.
What can we expect around the EUR?
EUR / USD was rejected once again from the 1.2160 / 70 region, pushing the pair back into the recent consolidation range. However, the constructive outlook for the pair remains unchanged in the long term and is always supported by expectations of reflation trading, hopes of a strong recovery in the region (and abroad), which in turn is supported by additional fiscal stimulus from the Fed and the ECB along with hopes for an acceleration in the launch of coronavirus vaccines. In addition, real interest rates continue to favor the euro area against the US, which is also another factor supporting the common currency along with the huge long-term positioning in the speculative community.
Key events in the eurozone this week: Minutes from the ECB on Thursday and preliminary PMIs for Germany and the eurozone on Friday.
Eminent Background Topics: The appreciation of the EUR could trigger a verbal intervention by the ECB on inflation problems. The EU Recovery Fund. Italian politics. Large bullish positions in the speculative community.
EUR / USD technical levels
At the time of writing, the EUR / USD pair is shedding 0.23% on the day, trading at 1.2078. Next support is at 1.2065 (Feb 17 low), followed by 1.1989 (100-day SMA) and 1.1952 (Feb 5 low). On the other hand, a breakout above 1.2169 (February 16 high), would target 1.2173 (23.6% Fibonacci retracement of the November-January movement) on its way to 1.2189 (January 22 high).
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