Daily Market Recap - EURUSD

The Euro is trading higher against the US Dollar on Thursday despite warning calls from the European Central Bank President Christine Lagarde over the deterioration of the covid-19 pandemic in the EU. The EURUSD is up 0.54 percent at the time of writing around the 1.222 handles.

The ECB monetary policy meeting today ended without any surprises. The target interest rate hasnt changed, and the central bank reiterated its pledge to provide more support to the economy if needed.

The biggest concern on the mind of policymakers remains the rising level of covid-19 cases in the Eurozone.

The health situation in Europe is far from improving. The appearance of more contagious variants and the relative slowness of vaccination campaigns are making it difficult to discern the horizon of a return to certain normality of economic activity. This makes the support of the political and monetary authorities all the more crucial.

Meanwhile over in the US, President Joe Biden has already begun acting on a number of promises made during his campaign notably signing executive orders granting more funding to the production of medical equipment and vaccines efforts. He also kicked off a new “100 days masking challenge” and issued a new decree requiring masks and physical distancing in federal buildings. All this in hopes of fighting the spread of covid-19 in the US.

(Chart Source: Tradingview 21.01.2021)

From a technical perspective, the main trend on the EURUSD remains down although edging slowly closer to the positive zone. The next point of interest will be how the pair reacts in the run-up to its 20-day moving average around the 1.22 mark. A cross above will solidify momentum in favor of bulls while failure to clear above will likely condemn the EURUSD back within the 1.21 to 1.22 range in the near term. On the downside, the EURUSD should find decent support along with the 1.20 psychologically significant support level.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.