EUR/USD zone from February 1.22000
The EUR/USD pair managed to climb to 1.22000, the place where it was on 25.02 this year. The dollar is still losing ground and is failing to consolidate at the psychological level at 90.00.
The eurozone economy re-entered the recession in the first quarter, as originally estimated, due to restrictions imposed to prevent the spread of the Covid-19 pandemic.
Gross domestic product fell 0.6 percent from the fourth quarter, when GDP fell 0.7 percent, according to a Eurostat report this morning. The rate was in line with the estimate published on April 30. After a major expansion in the third quarter of 2020, GDP fell once again, for the second time in a row, EU pushing the economy back into a technical recession.
Constant progress in reducing Covid infections and vaccinating the population suggests that the region’s economic recovery is underway, said Jack Allen-Reynolds, an economist at Capital Economics. He went on to say that employment and labor market participation should soon begin to recover, but the recovery in employment is likely to be rather slow. Another Eurostat report showed that the trade surplus fell in March due to falling exports amid rising imports. The trade surplus fell to a seasonally adjusted 13 billion euros in March from 23.1 billion euros in February. Exports fell 0.3 percent, while imports rose 5.6 percent.
DXY accelerates to the negative side and makes a break below the level of 90.00, and the next negative side is the lowest price for 2021, 89.20. Dollar index loses ground for the fourth consecutive session in the first half of the week and returns to the level last seen in late February in the region below 90.00.
Growing sales pressure came as yields of key U.S. 10-year notes moved within consolidation around the 1.65% zone. Regarding market reports on the issue of inflation, Fed Vice President R.Clarida reiterated yesterday that occasional bursts of higher inflation are considered transient, adding that the reopening of the economy is expected to be a gradual process. Atlanta Fed R. Kaplan also expects inflationary pressures to ease in 2022.
On the one-hour time frame, we can form one rising channel, where the EUR/USD pair is now testing the upper channel line, and if the resistance is high for the Euro, we can expect some pullback to the break zone of the previous high in zone 1.21650-1.21850. maximum pullback if it happens, we can expect the channel’s bottom line in the zone around 1.21500. Looking at the MACD indicator, we see that the bullish trend is fading so that the signal can go into a bearish trend, but only by following the EUR/USD pair within this channel.
