U.S. Dollar Retreats, More Gains Ahead in EUR/USD and GBP/USD?

Tuesday’s best performer was the euro which rose towards its current resistance at 1.2150. The recent strength in the U.S. dollar took a pause and if the euro climbs above 1.2180, we may see further gains towards 1.2270. Chances are at least in favor of further bullish momentum in the EUR/USD right now.

Treasury Secretary nominee Janet Yellen showed her support for Biden’s $1.9 trillion fiscal stimulus plan and said that the Biden administration won’t pursue a weak dollar. Her comments revitalized reflation hopes and serve as backdrop for risk sentiment. The U.S. dollar extended its retreat.

Joe Biden takes office as U.S. president and is to be sworn in at noon today in Washington.

GBP/USD

The pound stabilized above 1.36 after finding a halt at 1.3520. Since the pair fluctuates again in overbought territory in short-term time frames, we may see some corrective movements now but expect the 1.3550-area to serve as a support. On the upside, we expect the 1.3750-80-zone to limit potential gains in the near-term.

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