[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.20153 and 1.20549.
- Support line of 1.18874 and 1.18479.
Commentary/ Reason:
The euro reverses earlier gain to turn lower to $1.1960.
Although the dollar retreated Wednesday after the Fed's dovish interest rate stance, a positive factor for the dollar was the action by the FOMC Wednesday to raise its U.S. 2021 GDP estimate to 6.5% from the 4.2% estimate in December and reduce its 2021 year-end unemployment rate estimate to 4.5% from 5.0% in December. The FOMC also raised their 2021 core PCE estimate to 2.2% from 1.8% in December.
Concern about a third COVID-19 wave in Europe meanwhile, has become a catalyst and bearish factor for EUR/USD. Europe’s vaccine roll-out has been hampered by the suspension of AstraZeneca shots in several European nations amid concerns about possible serious side effects, threatening economic growth and recovery, and tarnishing vaccine rollouts as a pillar for a global recovery.
Meanwhile, easing of the pandemic in the U.S. is hawkish for Fed policy and supportive for the dollar as the 7-day average of new U.S. Covid infections fell to a 5-month low Sunday of 51,820.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92957 and 0.93286.
- Support line of 0.91893 and 0.91564.
Commentary/ Reason:
The dollar edged up against the Swiss franc as improving risk appetite hurt traditional safe-harbor currencies.
The greenback rose 0.15% higher, to stood at 0.92386 franc.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.40118 and 1.40603.
- Support line of 1.38548 and 1.38063.
Commentary/ Reason:
The British pound traded little changed, last at $1.39490, having gained 0.6% overnight.
After the dovish FOMC outcome which decided to keep US interest rates near zero, traders next focus is turning to the Bank of England rate decision Thursday.
The BoE is expected to keep its benchmark Bank Rate at a historic low of 0.1% and its bond-buying programme unchanged at 895 billion pounds later in the day.
The pound, meanwhile, also has come under pressure from profit-taking after it hit a near 3-year high last month on the back of a fast vaccine roll-out.
