The US economy is recovering faster than the EU economy
On Monday, the Euro/Dollar (EUR/USD) exchange rate fell to 1.1765. The quotes keep their positions below the key level of 1.1800.
The US Dollar is still in demand amid the prospects of a faster recovery in the country's economy compared to the Euro zone. Expectations of additional infrastructure spending are supporting the US currency, and renewed tensions between the US and China are also supporting the Dollar's appeal as a safe haven asset. Weak macroeconomic indicators from the Eurozone are putting additional pressure on EUR.
Against the background of a relatively quiet start to the week, traders will continue to monitor the dynamics of the markets in search of any significant momentum. US non-farm payrolls data is likely to be a key risk factor for the shortened week. A strong release will allow the dollar to further strengthen its position against the euro. And only very weak indicators will be able to reverse the current trend and turn the market against the USD. This year, the pair has already lost almost 600 points, and now we can talk about a full-fledged trend change. The quotes are moving to the local lows of October 2020 and will soon be able to test these levels.
In my trading forecast, I assume a further decline in the EUR/USD exchange rate to 1.1700.