EUR/USD – Technical Chart
January 18, 2021
A Pullback in the Short Term
Bearish in the new year after rejecting 1.230 level. Risk averse here on weak economic growth and the sluggish vaccine deployment in the Eurozone. Expecting continued risk-off move as $USD is in a technical bounce higher also. If key support fails at 1.207 it’s likely aggressive sellers will step in to breakdown to 1.889 level. I feel this is only a minor rotation lower that will find longer term buy volume at that level. EUR/USD is currently in positive correlation with sp500. Also bearish that Biden’s $1.9 trillion pandemic relief package, the American Rescue Plan will likely get diluted by Congressional opposition and that the final version will be much lower and deficient. The resulting projection of higher taxes weighing heavy on stock prices. I believe this plan will further weaken the US dollar in the longer term, and inflation likely the continued theme for late 2021.
