We mentioned in previous analyses of the EUR / USD currency pair that the strong recent gains have pushed the technical indicators to strong overbought levels. Any opportunity for a correction will be important to activate the selling. During yesterday's session, coinciding with the announcement of the minutes of the last meeting of the US Federal Reserve, the euro-dollar currency pair exposed to selling operations that pushed it towards the support level of 1.2160 before settling around 1.2174 at the beginning of trading on Thursday. The pair's gains during this week reached the resistance level of 1.2245, the highest in four months. The reopening of European economies was crucial to the euro’s gains.
Coinciding with the easing of Corona restrictions, the European Union has taken a step towards relaxing travel rules for tourists from outside the 27-nation bloc, with European Union ambassadors agreeing on measures to allow entry to visitors who have been fully vaccinated. The ambassadors also agreed to reduce the standards necessary for countries to be considered safe for the Covid-19 virus, from which all tourists can travel, depending on the status of the Corona virus and the status of vaccination. By current standards, the list includes only seven countries.
The European Union imposed restrictions on non-essential travel last year to slow the spread of the Coronavirus. Accordingly, the bloc's ambassadors said that many of these restrictions should be eased, including allowing travel on vacation to residents from outside the European Union. In this regard, European Commission spokesperson Christian Wiegand said that the European Council, which is composed of European Union countries, “will now recommend member states to ease some of the current restrictions” and to those who have been vaccinated. He did not mention a specific date for when the borders would reopen because European Union countries have not yet formally approved the measures
The European Central Bank reported that risks to the stability of companies, banks and financial markets remain "high" due to the disproportionate impact of the pandemic on the economy, warning that the eventual removal of relief measures could lead to an increase in bankruptcies.
In the US, the discussions during the Fed’s April meeting were released yesterday. It was the first time the US central bank had hinted that the time may approach to consider reducing the bank’s monthly bond purchases of $ 120 billion. The purchases have the effect of downward pressure on long-term interest rates. Officials were concerned about the issue being brought up, given the painful memories of the 2013 "tapering tantrum", when comments by then Fed Chairman Ben Bernanke about cutting bond purchases sparked financial markets and briefly spiked market interest rates.
According to the technical analysis of the pair: Despite the recent selling, the general trend of the EUR / USD currency pair remains bullish, and the reversal of the general trend will not occur without breaching the psychological support level of 1.2000. The pair is still the closest to stability above the 1.2200 resistance which still supports stronger bulls control. The resistance levels of 1.2245, 1.2320 and 1.2400 will push the technical indicators to strong overbought levels, after which forex traders are expected to consider selling to reap profits at any time. On the downside, 1.1985 support will remain the key to controlling the bears' performance.
Today’s economic calendar: German producer price index reading, current account numbers for the euro zone, and new statements from European Central Bank Governor Lagarde will be announced. During the US session, the number of weekly US jobless claims will be announced and the Philadelphia Industrial Index will be read.
