On Monday, Feb. 8, remains under pressure. The asset is moving close to 1.2040; market payers still favor the “greenback” and that’s quite logical.
Last Friday, President Joseph Biden managed to defend his administration’s $1.9 trillion COVID-19 stimulus plan. In keeping with the best American traditions, the plan was already called “the American Rescue” and might be approved even without any support from the Republicans in the weeks to come. Since the budget for 2021 was passed earlier, then the stimulus plan may be also approved pretty soon.
It is known that the plan may be activated as early as Mar. 15, right after the special unemployment benefits program expires. At that time, the final draft of the law to help enterprises and people that suffered the most from the COVID-19 pandemic is expected to be passed. The latest data on the US labor market, which showed that the Employment Change was only 49K in January, is an ace in the hole for the White House and may help to promote the stimulus plan faster.
In the H4 chart, after reaching the short-term target of the fifth descending structure at 1.1955 and then returning to test 1.2055 from below, EUR/USD is consolidating below the latter level. Possibly, today the price may break the range to the downside and resume falling to reach 1.1940. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving outside the histogram area, thus implying an ascending correction.
As we can see in the H1 chart, after finishing the correction at 1.2055, EUR/USD is consolidating around this level. Possibly, the pair may start another decline towards 1.1994 and then correct to reach 1.2010. Later, the market may form a new descending structure to break 1.1994 and then continue trading downwards with the target at 1.1940. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: after breaking 50 to the downside, its signal line is moving to reach 20, thus implying a new descending wave.
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