Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Common currency retreats from 10-month low
On Wednesday, the common currency drifted away from the minimum of ten months against the evergreen buck. Financial markets are currently reviving after a sell-off provoked by political instability in Italy.
The currency pair EUR/USD was seen at 1.1614, having rebounded from the minimum of Tuesday -1,1509, which is the highest outcome since July 2017.
For this month, the common currency has dipped against its American counterpart by up to 3.8%.
The appreciation of the common currency took place notwithstanding the everlasting uncertainty as for the formation of the government in Italy.
Market participants are afraid that the repeated elections in Italy can turn out to be a referendum on the role of Italy in the European block as well as its future in the euro area.
Simultaneously, market participants keep worrying about political risks in the euro zone.
The ongoing trade clash between the United States and China also generates worries among traders after Donald Trump announced that America will soon roll out tariffs on Chinese goods worth about $50 billion.
Moreover, this Friday the EU exceptions from the American import tariffs on aluminum and steel will expire.
On Wednesday, a report was uncovered that disclosed that inflation in Germany happened to be higher than projected values. Evidently, it strengthens the issues that the ECB officials will face when talking about the problem of taming the financial incentive program.
The common currency managed to ascend against the Japanese yen. The common currency EUR/JPY tacked on 0.73% coming up with an outcome of 126.41, having rebounded from Tuesday's minimum of 125.06 – an outcome, which hasn’t been observed since the end of June 2017.
The euro also edged up against the Swiss franc. The currency pair EUR/CHF rallied 0.4% being worth 1.1484 after a sag of 1% on Tuesday.
The EUR made a significant rise on the news of the stimulus expansion. Will it last long?
April seasonal patterns weren’t supposed to work, but somehow they did. Even a strong fundamental issue such as the global recession amid the coronavirus couldn’t overwhelm it. That’s why May seasonal patterns may work as well.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.