EUR/USD: America's vaccine and fiscal advantages to extend the broader downtrend below 1.17

EUR/USD has been able to recover as the dollar takes a breather from gains. Nevertheless, the pair is ready to dive under 1.17 for multiple reasons, Yohay Elam, an Analyst at FXStreet, reports. 

Key quotes

“President Joe Biden is set to present a massive infrastructure plan, which includes green investment and perhaps expenditure in ‘human infrastructure’ in addition to roads and bridges. The roughly $2 trillion plan is set to run for around eight years and may include tax hikes that would last even longer. If the US funds its new spending only by issuing more debt, Treasuries may suffer a sell-off and the resulting higher yields would boost the dollar.” 

“ADP's private-sector jobs report is due out ahead of the president's speech and is forecast to show an increase of over half a million positions. The payroll firm's statistics are not well-correlated with the official Nonfarm Payrolls report but tend to move markets. Any beat would lift the dollar.” 

“French President Emmanuel Macron is set to announce new measures to curb the rising number of COVID-19 cases, which is threatening to overwhelm French hospitals. In Germany, authorities have banned the use of AstraZeneca's vaccine for people under 60 after new cases of blood clots.” 

“Critical support awaits at 1.17 – EUR/USD launch level in 1999 and a psychologically significant level. The pair nearly touched it. Further down, 1.1630 and 1.16 played key roles in November.” 

“Some resistance is at the daily high of 1.1746, followed by 1.1805.”