The US dollar continues to lose ground amid the Fed's willingness to keep rates at record lows for a long time. In addition, the volume of asset purchases (QE) remains high along with the record pace of financial incentives for businesses and the population. All this supports the stock market and as a result contributes to the weakening of the USDX.
The activity of sellers under the psychological level of 91.00 remains very weak, however, the risk of further weakening of the index remains elevated.
The general weakening of the US dollar is one of the main drivers of growth. At the same time, the general optimism against the background of an increase in the rate of vaccination in Europe contributes to the strengthening of the EUR. Thus, the target at 1.2100 remains relevant, moreover, I do not rule out further growth to 1.2175.
Today, the economic calendar is still empty, so the further direction of price movement will depend not on the publication of macroeconomic reports, but on geopolitical events and the appearance of additional information on vaccination and monetary incentives of the ECB and the Fed.
The target at the technically important resistance level of 1.4000 has been reached, so active purchases under this level remain in the zone of increased trading risk. Nevertheless, the risk of further growth remains elevated. Therefore, the breakdown and fixing of quotes above 1.4000 will allow us to count on further growth to 1.4090 and further to 1.4180. To implement the bullish scenario, further weakening of the US dollar and the emergence of additional incentives for buying GBP are necessary. Any information about the effectiveness of vaccination in Britain and the reduction of quarantine restrictions will help strengthen the couple.
The psychological support level of 108.00 has already been reached, however, the current growth may be a correction. Thus, another return of the pair's quotes to 108.00 will significantly increase the probability of a further decline to 107.00. On the way to the marked support level, there is another obstacle - 107.80.
The first signal indicating the willingness of buyers to resume growth will be a breakout of the resistance of 109.00.
The above overview is not a direct guide to action, but only a recommendation.
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