EUR/USD: The scales are tilted toward the critical resistance at 1.2150

EUR/USD has been edging lower as US bond yields turned higher. However, concerns about the US economy and several points of light in the old continent may mount an attack on 1.2150, a critical resistance line, FXStreet’s Analyst Yohay Elam reports.

Key quotes

“After nearly stalling for several weeks, fresh deliveries of covid vaccine doses have revived the old continent's efforts. Moreover, AstraZeneca – a pharmaceutical that had been on a collision course with the EU over supplies – plans to double its output.”

“Germany has announced a further improvement in its coronavirus statistics. Europe's locomotive has seen a drop of active COVID-19 cases to around 155,000, the lowest since late October. Other countries are also seeing tentative declines from the peak.”

“Most political parties in Italy have agreed to back former European Central Bank President Mario Draghi to lead the country. The incoming Italian Prime Minister enjoys unmatched clout in financial markets and helps boost confidence in the economy.”

“The economic calendar could push the greenback back down. US jobless claims disappointed with 793,000 in the week ending on February 5, worse than expected. The focus on Friday is the University of Michigan's preliminary Consumer Sentiment gauge for February.”

“Euro/dollar has been trading above the 50 and 100 Simple Moving Averages but below the 200 SMA on the 4-hour chart. That 200 SMA comes out at 1.2150, converging with Thursday's highs – and not too far from the peak in late February. Overall, 1.2150 is critical resistance.”