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The EUR/USD is under pressure as traders reflect on the massive $1.9 trillion stimulus package passed by the US senate during the weekend. The pair has declined to 1.1908, which is a few pips above the lowest level last week.
What happened: After days of deliberations, the Democratic-controlled Senate passed its version of the $1.9 trillion stimulus package. No Republican Senator voted for the deal, which will now move to the House of Representatives for reconciliation. It will likely be signed into law this week.
In response to the deal, global stocks, commodities, and bond yields rose as investors reflected on its impact. The yield of the ten-year rose to 1.575%, which is close to the highest point this year. This is partly because investors now anticipate higher interest rates in the US faster than expected.
The four-hour chart shows that the EURUSD price declined sharply today. It has also formed a head and shoulders pattern that is usually bearish. The neckline of this pattern is at 1.2025. The pair is slightly below the short and longer moving averages. Therefore, the downward trend will likely continue as bears target the next psychological level of 1.1850. However, a bounce above 1.1950 will invalidate this prediction.
