EURUSD
The EUR/USD pair traded with a bid tone for the entire previous month, with some weakness seen only on the last trading day of the week. Surprisingly or not, the 1.20 level is still providing strong support, but the pressure remains for a move and close below 1.20 in May.
Europe has gotten its act together, and the vaccination efforts have picked up steam. Last week, Germany vaccinated one million adults in a single day, while Spain and Italy half of that. It appears that the slow vaccination pace seen in the first quarter was due to lack of vaccines rather than anything else. Now that vaccines are available, Europe even outpaced the United States.
The manufacturing PMI data yesterday showed a strong sector throughout Europe. However, this is nothing new for the markets as the bounce-back was expected given the economies are reopening fast.
The technical picture shows a currency pair at crossroads. The bounce higher from the neckline of a head and shoulders pattern is strong enough to put pressure on bears, but the market needs to remain elevated if it is to invalidate the reversal pattern. If not, bears will pressure the neckline.
The 1.20 is key for future price developments. A daily close below the level should be bearish, and traders need a stop to 1.2180 and a take profit below 1.15, to make the most of the pattern.
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