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Christopher Lewis
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EUR/USD

The Euro initially tried to rally during the trading session on Thursday but found the area around the 1.1830 level to be far too resistive to get above. That was an area where we had formed the most recent low, and now that we are below it and have found it too much to get above, it is likely that we are going to continue to see the Euro drop significantly, perhaps down to the 1.16 handle where I see significant support.

EUR/USD Video 26.03.21

The Euro is suffering at the hands of a lackluster vaccination program, and of course the fact that several parts of the economy have been locked down yet again in places like Germany and France. Beyond that, the United States seems to be light years ahead in its vaccination programs and of course the recent economic numbers coming out of America have been stronger than anticipated overall. Even beyond that, if there is going to be more of a “risk off” attitude out there, then it makes sense that the US dollar would continue to strengthen. Finally, higher yields in America will also be a contributing factor to US dollar strength going forward.

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After all, German Bunds offer a -34 basis points of yield, while the US Treasury Notes offer 1.7% on the 10 year. It does not take much imagination to see why there might be more of a move towards the greenback overall. At this point, I think it is very likely that we are going to continue to see negative pressure, and with that being the case I think it is likely that we see a drift lower.

For a look at all of today’s economic events, check out our economic calendar.

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