Dollar gains on US stimulus and vaccine hopes

Updated: March 18, 2021

EUR/USD: The European currency declined against the US dollar on Monday due to optimism over the economic stimulus and promising updates on COVID-19 vaccines. The US House of Representatives approved President Joe Biden’s $1.9 trillion coronavirus relief bill early on Saturday. Markit published the final readings of the February manufacturing PMIs for the Eurozone, most of which were upwardly revised. According to the official report, data pointed “to the quickest expansion in the eurozone manufacturing sector for three years in February.” The US Markit Manufacturing PMI came in as expected at 58.6, although the official ISM index jumped to 60.8, beating expectations. Today Germany is publishing January Retail Sales, and the Eurozone will publish its preliminary estimate of February inflation. Also, we are expecting data on the US ISM Non-Manufacturing Index, scheduled to be released on Wednesday. The local support is located at 1.2015, the breakout below this barrier could take the pair towards 1.1960.

SELL 1.2010/TP 1.1960/SL 1.2027


AUD/USD: The Australian dollar rose against the US dollar on Monday after the heaviest drop in a year the day before. A “flash crash” in AUD occurred due to expectations that the Reserve Bank of Australia’s recently unscheduled bond purchases will battle the inflation fears. The Building Permits data and RBA Interest Rate Decision were published last night. Building Permits dropped 19.4% on month in January against seasonally adjusted 10.9% in December and expectations of a 3% contraction. RBA Interest Rate Decision remained unchanged at 0.1%. The local support level can be seen at 0.7720, a breakout below could take the pair towards 0.7650.

SELL 0.7715/TP 0.7650/SL 0.7737


XAU/USD: Gold fell against the US dollar on Monday. It also finished February with a 6.6% decline, its worst month since November 2016. This week is all about Fed speak and if they can signal a little concern over the impact of higher yields on the recovery, that should give many investors the all-clear sign for scaling back into gold. Federal Reserve Chairman Jerome Powell will speak about the economy at an online event hosted by The Wall Street Journal on Thursday, joining several officials of the central bank who will also be giving their thoughts on economic recovery from Covid-19 this week. The local support level can be seen at $1695, a breakout below could take the pair towards $1645.00.

SELL $1690.00/TP $1645.00/SL $1705.00