Safe-haven flows out of the dollar have driven EUR/USD higher as risk appetite rises, but major technical resistance around 1.2000 suggests bulls should buy dips towards the 200-day moving average at 1.1905 or wait for a break of 1.2050.
Belief in a broad-based U.S. COVID-19 recovery is growing, backed by the Federal Reserve nL1N2M72KA.
President Joe Biden delivered his coronavirus stimulus plan, the vaccine rollout has been impressive nL1N2M60XL, and the infrastructure package is edging forward nL1N2M71LM.
Conversely in Europe, an already hesitant vaccine rollout has stalled on doubts about the J&J and AstraZeneca shots nL8N2M72OD.
European Central Bank President Christine Lagarde on Wednesday likened the euro zone economy to a patient that "is out of a deep crisis but still on two crutches" nL1N2M71HJ.
Fundamentally, this is a setup for EUR/USD weakness, but if risk appetite remains elevated, EUR/USD can extend gains, and any improvement in the European outlook would provide extra support.
Technically, 5, 10 and 21 DMAs, plus momentum studies base or climb, which is a positive setup, but a formidable raft of resistance approaches around the psychological and option magnet of 1.2000.
The 1.1990 mid-March range top, 1.2007 Ichimoku cloud base, which has capped since early March, 1.2015 upper 21-day Bollinger band, a good indicator of an overbought market, and 1.2037, 61.8% of the February-March fall, will slow short-term gains.
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