EUR/USD to fall below 1.20 amid concerns about a patchy recovery

EUR/USD has dropped off the highs, surrendering to dollar strength. According to FXStreet’s Yohay Elam, a bear attack on 1.20 looks imminent as markets see glass half-empty.

Upbeat news coming from Brussels is insufficient to help the euro

“The old continent's vaccination campaign is picking up speed, but that seems to already be in the price. Instead, markets seem to focus on some sober comments from Jerome Powell, Chair of the Federal Reserve. Despite acknowledging America's recovery, the powerful central banker characterized this upswing as ‘patchy’ and stressed that unemployment among those earning less is still elevated.” 

“The comeback from the pandemic could be too quick to handle and may require some cooling down. These worries are weighing on the market mood and pushing the safe-haven dollar higher. Will it continue? Overall, supply bottlenecks should be resolved and so should issues related to the virus. However, in the shorter run, various issues will likely cause jitters, and that could push the greenback higher.” 

“Support awaits at 1.2015, the weekly low, and then by 1.1990 – a double-bottom and separator of ranges. Some resistance is at 1.2075, the weekly high, followed by 1.2117, the late-April swing high.”