EUR/USD to turn down as concerns about vaccines come back to the fore

EUR/USD has staged a recovery on upbeat vaccine and growth forecasts but concerns about eurozone immunization supplies and a tad of Fed hawkish may change the picture, Yohay Elam, an Analyst at FXStreet, reports.

See: EUR/USD to plunge towards 1.15 in the second quarter as dollar's strength lingers – Credit Suisse

The EUR/USD's bounce may have gone too far

“Even before the summer – that is when most Europeans may get a COVID-19 vaccine, according to new estimates. The upbeat vaccine forecasts from the bloc joined an upgrade to economic ones from the International Monetary Fund. The IMF lifted global growth estimates to 6%, and that included upgrades to eurozone countries.”

“Concerns about vaccines have come back to the fore. Moderna told Germany that it is forced to delay the next shipment of vaccines – extending the trend of postponements from all pharmaceuticals. Moreover, the EU's immunization programs heavily on AstraZeneca's inoculations, and it is unlikely that all Europeans will take it up. The European Medicines Agency (EMA) is set to provide an update on the potential correlation with blood clots.” 

“The Federal Reserve is set to release the meeting minutes from its latest rate decision and it may show growing optimism. Investors may interpret an upbeat message as a subtle hint that borrowing costs are set to rise sooner rather than later – boosting the greenback.”

“Resistance awaits at 1.1880, the daily high, followed by 1.1920, which provided support in mid-March. Support is at 1.1820, which capped EUR/USD on the way up, followed by 1.1780.”