Forex EUR/USD forecast for today - 1.1660
On Wednesday, the euro/dollar (EUR/USD) was able to recoup some of the losses and rose in price to the level of 1.1725.
According to a preliminary estimate, inflation in the Euro area rose by 1.3% in March. At the same time, the core consumer price index unexpectedly fell by 0.9%. The quotes met strong support in the area of 1.1700. The slow pace of vaccine deployment in Europe and the faster recovery of the US economy, compared to the G10 counterparts, all contribute to the renewal of the position in relation to the single currency. However, the ECB's determination, combined with the expected recovery of economic activity in the region in the post-pandemic stage, is likely to prevent a much deeper pullback of the pair in the long term.
Nevertheless, the euro/dollar exchange rate is ready to fall below the support of 1.1700 for several reasons. President Joe Biden intends to present a large-scale infrastructure development plan. The plan, worth about $3 trillion, is designed for eight years and may include tax increases for a longer period. If the US funds its new spending only by issuing more debt, Treasury bonds may suffer a sell-off, and as a result, higher yields will drive the dollar higher.
In the forecast, I assume a decline in EUR/USD to the support level 1.1660.