This week is shaping up to be a critical time for the Euro due to the amount of economic data released from the Eurozone and depending on the numbers, it may dictate whether the European currency will continue its decline against the greenback or maybe a rebound is in the making.
Last week, the European Central Bank president Christine Lagarde laid out the monetary policy steps moving forward for the Eurozone and noted that the central bank will remain highly accommodative for the foreseeable future which includes ultra-low interest rates.
This reinforces the view that the ECB will be one of the last major central banks to tighten monetary policy and on the back of this move, the Euro may remain weak against all currencies across the board.
The rising amount of Covid cases and the latest interest rate decision from the US Federal Reserve on Wednesday will also be closely monitored by the market this for signs on when the central bank plans to reduce their quantitative easing program, and also lift interest rates from record lows brought about by the recession caused by the coronavirus
The Euro/USD currency pair has once again tested the major support level at $1.1762 and as in the past 5 trading sessions has found strong support and has bounced significantly towards the $1.1800 mark.
This is a positive sign to kick off the week for the European currency but as mentioned earlier, a lot will depend on the release of economic data from the Eurozone and the tone of the Fed with this week’s interest rate decision.