- EUR / USD falls to daily lows and is approaching 1.2100.
- The softer sentiment in risk appetite weighs on the pair.
- The final CPI for January in Spain stood at 0.0% month-on-month and 0.5% year-on-year.
The common currency is moving on the defensive and dragging EUR / USD back near the round 1.2100 level at the end of the week.
EUR / USD weaker due to USD bounce
EUR / USD looks on the defensive on Friday after three consecutive daily rallies. The pair’s inability to advance above the 1.2150 region appears to have sparked some profit-taking. between investors and the return of sellers to the markets.
In a broader perspective, solid growth expectations in the region continue to be supported by the better performance expected from the launch of coronavirus vaccines and additional help from increased US fiscal stimulus.
In the eurozone economic calendar, the only publication has shown that the final CPI in Spain remained flat on a monthly basis during the first month of the year and rose 0.5% in the last twelve months.
During the American session, the preliminary release of US consumer sentiment measured by the University of Michigan will be the highlight on Friday.
What can we expect around the EUR?
EUR / USD faces stiff resistance around the 1.2150 region so far this week. The rally from last week’s lows near 1.1950 is supported by constructive long-term prospects for the pair and always supported by expectations from reflation trading, hopes for a strong recovery in the region (and abroad). ), which in turn is underpinned 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.
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 0.12% on the day, trading at 1.2113. Immediate support is at 1.1952 (February 5 low), followed by 1.1887 (61.8% Fibonacci retracement of the November-January move) and 1.1719 (200-day SMA). On the other hand, a breakout above 1.2144 (February 10 high) would target 1.2173 (23.6% Fibonacci retracement of the November-January move) on its way to 1.2189 (January 22 high).
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