EUR/USD And GBP/USD: Bullish Sentiment May Deteriorate
MaiMarFX | Jan 25, 2021 10:19
Friday saw the euro tread water with the price reluctant to push above the 1.2180-mark. Thus, the technical picture in the EUR/USD has not fundamentally changed but we still anticipate another leg up towards 1.2250-70. If the pair is however unable to steady above 1.22 traders will focus on lower targets at 1.20 and 1.1960.
The U.S. dollar accelerated against other peers Friday as investors mulled the prospects for stimulus amid the worsening pandemic. There are warnings of longer and stricter lockdowns in the wake of mutant Covid-19 strains which might hinder a near-term economic recovery. The U.K.’s health minister warned that coronavirus vaccines may be less effective against new variants of the disease.
As for Wednesday’s Federal Reserve policy meeting, market participants hope that Federal Reserve Chair Jerome Powell will provide reassurance that $120 billion of monthly bond purchases won’t be tapered any time soon. Generally speaking, economists do not expect quantitative easing to be scaled back until 2022 so traders should not expect any surprises at the Fed’s meeting.
GBP/USD
The British pound managed to climb back above 1.37 after Friday’s depreciation against the U.S. dollar. Looking at the technical picture all signs are pointing to a further uptrend with a higher target seen at around 1.38. Sterling bears, on the other side, may focus on a decline below 1.36 in order to anticipate increased bearish momentum.
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.
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