Last week, EUR/USD exhausted steam within a range of 1.1815-1.1890; initially boosted vaccine optimism (Moderna's update) and a dovish tone from the FOMC and making highs in the 1.1890s, before reversing lower to set lows at the low 1.1800s on renewed concerns about the deteriorating condition of the global outbreak of Covid-19. Then on Thursday, the pair rallied again as US fiscal stimulus talks between the Democrats resumed, hitting the weekly highs again before returning to current levels.
Weis Waves shifting
Weiss waves have commenced shifting to red on lower timeframes as the ADX at D1 refuses to go higher than 21. ADX at H1 and H4 remains below 10. The pair is range bound and a few pips over head is very strong daily and weekly resistance. The price will hit this ceiling then rebound downwards- perhaps 100 pips.
Macroeconomics
The balancing act of pandemic and lockdown problems (USD bullish) versus vaccine optimism, an increasingly dovish tone to talk about FOMC, and US political instability (probably all USD bearish factors) are expected to continue. Coupled with the pair floating on a tenuous overextended high from the July skyrocket, there is very little keeping EURUSD afloat.
It is uncertain how the US Treasury's decision not to extend the Fed's emergency loan programs from 31 December (and to repatriate $455B in Treasury coffers) would impact markets; a Fed with fewer economic-support ammunition could be a negative USD as it could signal slower US growth ahead. Or will that cause a USD upside on higher demand for havens as a result? The repatriated assets, meanwhile are likely to be used to finance further fiscal stimulus. So does that really indicate faster growth ahead (probably a positive risk appetite)? Or does Congress need to be forced to pass a new stimulus bill (negative risk appetite)?
Weis Waves shifting
Weiss waves have commenced shifting to red on lower timeframes as the ADX at D1 refuses to go higher than 21. ADX at H1 and H4 remains below 10. The pair is range bound and a few pips over head is very strong daily and weekly resistance. The price will hit this ceiling then rebound downwards- perhaps 100 pips.
Macroeconomics
The balancing act of pandemic and lockdown problems (USD bullish) versus vaccine optimism, an increasingly dovish tone to talk about FOMC, and US political instability (probably all USD bearish factors) are expected to continue. Coupled with the pair floating on a tenuous overextended high from the July skyrocket, there is very little keeping EURUSD afloat.
It is uncertain how the US Treasury's decision not to extend the Fed's emergency loan programs from 31 December (and to repatriate $455B in Treasury coffers) would impact markets; a Fed with fewer economic-support ammunition could be a negative USD as it could signal slower US growth ahead. Or will that cause a USD upside on higher demand for havens as a result? The repatriated assets, meanwhile are likely to be used to finance further fiscal stimulus. So does that really indicate faster growth ahead (probably a positive risk appetite)? Or does Congress need to be forced to pass a new stimulus bill (negative risk appetite)?