The Euro is Under Pressure, Declines as USD, GBP Gains
The greenback's resurgence impacted the Euro, whose Santa's Rally continued despite news from Germany. Buoyed by several factors, including the rallying stock market and record low-interest rest, the single zone currency remains under pressure on Jan 14, falling against the USD and GBP. This week alone, the Euro has shed close to one percent as technical candlestick arrangement points to a state of over valuation. Accordingly, if the currency doesn't recover today, this might be the sharpest decline since October 2020.
For the past few months, the USD emerged as a preferred punching bag for major currencies, including the Euro. However, this trend seems to be ending as the greenback grows stronger thanks in part to skepticism about the Eurozone economy, increasing coronavirus caseloads, and the general state of political acrimony ending in the United States. Oddly, the Euro is being kept afloat by stellar industrial production, which is at pre-Coronavirus levels, which in turn strengthens Eurozone export demand, forcing PMIs into expansionary territory.
Impact on the Euro: Bearish. The Euro has to clear key technical levels if the uptrend is to continue. If not, activities in the United States, and investors who are pro-USD, may overshadow events in the Eurozone, causing more declines going into next week.
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