EURUSD and GBPUSD Analyses. New Covid Variance Might Checkmate the Vaccine

Donald Trump on his official Twitter account stated that the bill proposed by the Congress is a disgrace and is only $600 which is much lower than the anticipated $2000 per an individual. Although Trump has less than a month left before he leaves the White House, he can still “veto” the bill, otherwise it will be accepted, so far President Trump only threatened not to accept the bill.

If the Congress delays the formal transfer of the bill into the law due to the actions of Trump or due to other means, the Dollar might as well strengthen. As Europe and the UK are fighting against the new virus strain and no cases yet are reported in the US, Dollar appears stronger. If the bill is accepted, the US Dollar index will drop once again, if the bill is postponed and Trump’s proposal on a larger stimulus pack is put before the Congress, the Dollar index will plummet, nevertheless the developments in Europe and the UK.

The US government did not set a requirement of passing a Covid-19 test to passengers flying from the UK to the US before boarding their flight, despite the rapidly spreading new Covid-19 strain. Airline operators agreed to allow only those passengers who have been tested Covid-negative within 72 hours before the flight. While the US officials argue on which action is the best to be taken to keep the new variant away from the US, the top US infectious disease expert Dr. Fauci yesterday, December 22, said on live-TV that it is possible that the new variant is already in the US. The contagiousness of the new coronavirus will push the governments to accelerate the spread of the vaccine, although the effectiveness of the vaccine on the new strain is questioned.

The US Dollar Index today lost 0.32% in value which conversely pushed both the Euro and the British pound against the US Dollar upwards. Hanging Brexit negotiations still hold the two major European currencies in an uncertain position, whereas the deal gets postponed, however the EU Chief Negotiator on Tuesday put certainty into the deal saying that both sides are ready to make a “final push”.

The EUR/USD continues the uptrend, though was withheld by the dynamic resistance of the ascending channel. Spanish GDP reported earlier today was supposed to set the Euro higher, though the actual numbers were slightly lower than the expected, 16.4$ against the forecasted 16.7% as per Q3.

Currently the pair is traded at $1.21950 which is below the resistance of 1.2200. The pair on a 4H chart has formed a symmetrical triangle and the breakout of any edge of the triangle will signal the short-term trend continuation of the pair.

If the price breaks below the lower edge of the triangle, Euro will drop towards closest support levels at $1.21227 and below that to $1.20840.

The British Pound against the US Dollar was able to gain 0.50% today after the test of the dynamic support and an upper 0.5 level of the Pitchfork. By the time writing of this article the GBP / USD quote on Overbit $1.34300 and is testing the December 14’s high.

Higher lows and higher highs demonstrate the willingness of the pair to continue the uptrend. Both Moving averages 100 and 200 and the EMA50 support the uptrend continuation, MACD line already crossed the signal line and is also showing signs of the uptrend continuation. If GBP / USD closes above $1.34630, the next resistance to watch would be at $1.35280, where the pair will hit the static and dynamic resistances.

The US Economic data which are expected to be released today do not look positive, Initial Jobless claims are expected to be at the same level as previously reported 885K and new home sales in November expected to drop slightly and be at 995K compared to the October’s 999K, personal spending as per November is expected to be as low as -0.2%, 0.7% lower compared to the October’s 0.5%.