EURUSD FINISHES THE WEEK WITH A DOWNWARD MOVEMENT !
With the Fed meeting taking a dovish tone in anticipation, the dollar's pullbacks accelerated the upward momentum in parity. While the Fed did not change its policy rate at its April meeting, it said indicators of economic activity were strengthening due to progress in grafting and strong policy support. On the other hand, he underlined that inflation has also risen, but this rise is largely due to temporary factors. Fed President Powell's announcement at a press conference that there was no time to start talking about reducing asset purchases also damtered market expectations of a 'tapering'.
Thus, the impact of the Fed, which is still in monitoring mode of its economic outlook, caused some devaluation on the dollar side. On the other hand, yesterday the U.S. economy grew by 6.4% in the first quarter, while the period of decline continued with 553 applications for weekly unemployment benefits. Following these developments, we saw U.S. 10-year bond yields rise to 1.68%. Thus, with the premium on the dollar side, we see that the decreases in EURUSD parity have reached 1.2080.
Speaking of the eurozone economy, ECB President Lagarde said it was too early to say that the worst was over in the economic impact of the Covid-19 crisis, while the downside risks were still being maintained. Lagarde also underlined that a strong economic recovery could be seen in the second half of the year due to vaccination. The Eurozone economy contracted by 0.6% in the first quarter, while the consumer price index rose to 1.6%. The unemployment rate data has fallen to 8.1%.
Following these developments, the EURUSD parity may be limited with the protection of the 1.2057 threshold. In this context, we monitor the recovery within the framework of resistance levels of 1.21 and 1.2156. However, let's consider the possibility that declines in pricing below a possible level of 1.2057 may accelerate with the support threshold of 1.20 and 1.1958.