EUR/USD Above 1.20: ECB Scandal May Affect Ability to Talk Down the Euro
MaiMarFX | Dec 02, 2020 09:53
And finally, we can confirm that 1.20 is NOT the limit in the EUR/USD.
The market currently rallies on improved economic prospects and so did the euro.
We got a bullish breakout above 1.20 which is why we will shift our focus to higher targets at 1.21 and 1.23. The 1.21-level could serve as a short-term resistance in the EUR/USD but if we see a sustained break above that threshold the next target will be 1.2320. For the sentiment to change in favor of the bears we would need to see a break below 1.1920 and further 1.1870-50.
For all eurosceptics who now hope that the European Central Bank will attempt to talk down the euro at their next meeting, the following should be noted: News that ECB chief economist Philip Lane has been providing exclusive commentary and information to a select group of individuals and banks is an outright scandal at the ECB. Philip Lane is the most outspoken dovish member at the central bank and now that he is in the spotlight his voice may be tamped down, reducing the likelihood of directly influencing the euro exchange rate.
The U.S. dollar extended its slide to a more than two-year low.
Federal Reserve Chairman Jerome Powell appeared before the Senate Banking Committee Tuesday and while he welcomed the rapid development of the Covid-19 vaccine, on the one hand, he warned that the U.S. economy remains in a damaged and uncertain state on the other hand.
The British pound was able to climb above 1.34 and as long as it holds above that crucial barrier, we expect prices to rise. This morning we went short at 1.3380 and took profit at 1.3340.
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