The EUR/USD is down by more than 0.60% in reaction to the new covid virus strain in the United Kingdom and the new stimulus deal in the US. The stronger dollar has also contributed.
What happened: After months of negotiations, congressional leaders and the White House reached a deal that will provide about $900 billion in additional stimulus. The funds will provide a $600 stimulus check to individuals. It will also provide a $300 boost in the weekly unemployment benefits. Other funds will go towards local governments, vaccine distribution, and small businesses.
What else: The EUR/USD price is also dropping because of the new strain of Covid that is spreading in Europe. The virus, which is spreading faster than the normal strain, has pushed more countries like Germany and France to cut travel to and from the UK.
Also, another item moving the EURUSD is the lack of progress on Brexit. Finally, the dollar index, which has surged by 0.45%, has also contributed.
EUR/USD forecast: The EUR/USD price has declined sharply today. On the hourly chart, we see that the pair has dropped sharply from the double-top level of 1.2272 to the current 1.2182. The 14-period and 28-period moving averages have also made a bearish crossover.
Therefore, the pair will possibly continue dropping as bears aim for the next key support at 1.2150. The invalidation point for this price action will be 1.2200.
EUR/USD technical chart