The mood across markets turned sour on Tuesday as investors considered the possibility that the $1.9 trillion fiscal package might be delayed. Market concerns over delays in distributing the vaccine and jitters before earnings season fuelled the caution, sending Asian stocks lower during early trade along with U.S futures.
President Joe Biden has said that he is open to negotiating on his proposed $1.9 trillion stimulus deal, and is hopeful to bring Republicans behind it. This could create delays and even lower the scope of the package. Renewed drama on the fiscal front will most likely create a fresh layer of political uncertainty – something that could support the Greenback.
Dollar still in bear trend on monthly
Bears remain in the driving seat on the monthly timeframe as there have been consistently lower lows and lower highs. Prices are trading below the 20 Simple Moving Average while the MACD trades to the downside. Sustained weakness below the 92.00 resistance could encourage another decline below 90.00 and possibly lower.
Same story on the weekly timeframe…
Prices are trading below the 100 and 20 Simple Moving Average. A breakdown below 90.00 is likely to signal a decline towards 90.00, 89.20, and 88.30. Alternatively, a move back above 90.80 may open the doors towards 92.00.
Head and shoulders back in play?
It looks like the inverse head and shoulders pattern could play out in the week ahead if a daily close above 90.50 is secured. This could trigger a move towards 91.20 and 92.00, respectively. Should 90.50 prove to be a stubborn intraday resistance, prices may decline back towards 89.30.
Pound capped above 1.3700?
Guess what? The Pound has yet again failed to break above the 1.3700 level.
The weekly trend on the GBPUSD is bullish but it seems like Pound bulls need a fresh catalyst. If prices are able to push above and secure a weekly close above 1.3700, this could open the doors towards 1.3780 and 1.4000. Alternatively, weakness below 1.3700 may result in a decline towards 1.3482.
EURUSD finds comfort above 50 SMA
Over the past few days, the EURUSD has found support above the 50 SMA. Bulls are likely to exploit this support to push prices towards 1.2150 and 1.2215. If prices are unable to break above 1.2150, a decline towards 1.2050 and 1.2000 could be on the cards.
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