EUR USD TAKES RETURN FROM 1.2220 THRESHOLD

After the dollar index increased its value losses towards the last trading day of the week, the increases in the EURUSD parity reached the level of 1.2250. However, with the 1.60 percent increase in the US 10-year bond yields, the premiums in the dollar index brought the parity to the level of 1.2140 below. Although the risk appetite was triggered again in the markets after Fed Chairman Powell's dovish statements to dispel inflation concerns, the effect of this movement was somewhat limited. The US $ 1.9 trillion stimulus package is expected to pass the Budget Committee and vote in the US House of Representatives today. However, it is seen that this development did not affect the optimism in the markets much. While the US economy grew by 4.1 percent in the fourth quarter, it is seen that the increase in durable goods orders with 3.4 percent above expectations triggered the recovery on the dollar side. In the unemployment pension applications, we see that the data declined to the lowest level in 3 months with 730K people on a weekly basis.

Regarding the Euro Area, the consumer price index for January was at the level of expectations with 0.2 percent. ECB President Lagarde explained that the 1.8 trillion euro PEPP package and bond purchases help with flexibility. The Euro Zone consumer confidence index for February came in line with the expectations with minus 14.8. Although these developments do not produce many positive catalysts for the Euro Area economy, it is seen that the value gain in dollar assets on the last trading day of the week accelerated the retreat of the parity.

Following these developments, in an effort to pull back to the level of 1.2140, the decreases can be expected to be limited if the parity is sustained above this level. Especially in pricing above this level, we will follow the compensation of the decreases within the frame of 1.2175 and 1.2220 resistance levels. However, if the pair tests below 1.2140 level, passing 1.2090 support below may cause the declines to continue to 1.2052 level.