EUR/USD: ECB leaves the euro well-positioned the taxman

EUR/USD has been bouncing off 1.20 as markets digest the news of US tax hikes. In the view of FXStreet’s Analyst Yohay Elam, the euro is well-position  |  23/04/2021 08:35

EUR/USD has been bouncing off 1.20 as markets digest the news of US tax hikes. In the view of FXStreet’s Analyst Yohay Elam, the euro is well-positioned as the ECB's upbeat message may keep the shared currency bid.

See: EUR/USD to surge towards 1.2349 and beyond amid a tone of quiet transformation – DBS Bank

There are better chances for EUR/USD to rise than fall

“Growth without inflation, does it get better than that? That has been the message from the European Central Bank, which could lead to fresh gains on Friday, assuming no new fears for markets. The ECB acknowledged better prospects for the old continent while pledging to keep supporting it with its bond-buying scheme. Since the pandemic broke out, euro-printing has proved positive for the common currency, as it supports government spending. Additional positive comments are also promising for euro bulls.”

“President Joe Biden is set to raise taxes on capital gains. Will fears of the taxman continue spooking markets? It is essential to note that the Commander in Chief pledged such moves on the campaign trail and that such moves still need to pass Congress. If the focus shifts away from this news to other topics – such as the improving virus situation on both sides of the pond – EUR/USD has room to rise.”

“The economic calendar features Markit's preliminary Purchase Managers' Indexes for April on both sides of the pond and businesses have likely remained optimistic about the recovery. On the other hand, worries about the rapid spread of the coronavirus in India and Japan may dampen the market mood.”

“Resistance awaits at 1.2065, Thursday's high, which defends the April peak of 1.2080. Further above, the upside target is 1.2130.” 

“Support below 1.20 is at 1.1950, followed by 1.1930 and 1.1860.”

 

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