Focus on Biden’s Economic Support Plans

U.S. President Donald Trump was impeached by the U.S. House for encouraging supporters before the Jan. 6 riot, making him the only U.S. president to be impeached twice. Trump’s term ends on Jan. 20.

The market, however, shrugged off the proceedings in Washington on Wednesday. The focus remains on further economic stimulus and a report indicated that President-elect Joe Biden plans a Covid-19 relief package of about $2 trillion. Biden is expected to announce his economic support plans later in the day.

The U.S. dollar slightly rose against other peers but most USD strength was seen against the euro sending the EUR/USD back to the recent 1.2140-support. The bigger the stimulus plan the more likely Treasury yields might extend higher and this could in turn help bolster the dollar.

EUR/USD: If the euro drops below 1.2130, a next important support level will be at 1.2050. On the upside, however, if the euro is able to rise above 1.2225, we anticipate further gains towards 1.2350.

GBP/USD: The cable stopped its rise at 1.37 but steadied above 1.36. As long as the pair remains above 1.3570 chances are in favor of sterling bulls. A break below 1.3530 on the downside could increase bearish momentum towards 1.34.

DAX: The index fluctuated in a narrow price range between 13980 and 13860. Earlier this morning it touched the 14000-level again and as long as the price remains above 13950, we could see further gains.

We wish you good trades!

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