EUR/USD: Uptrend to hit a bump in the road amid three concerns

EUR/USD has kicked off 2021 by resuming its gains amid dollar weakness but concerns about covid variants, slow vaccine distribution and Georgia's special elections may bring the pair down, FXStreet’s Analyst Yohay Elam reports.  

Key quotes

“While additional immunization schemes received regulatory approval in the US, Europe and elsewhere, deployment is proving slow. US top epidemiologist Anthony Fauci has expressed optimism about a ramp-up in vaccinations and manufacturing should pick up in Europe as well. Nevertheless, the current bottlenecks may weigh on sentiment.”

The old continent is suffering from a worrying spread of covid, a result of cold weather and family gatherings around the holidays. Moreover, the contagious strain of the virus discovered in Britain is probably prevalent in the old continent as well.”

“After President Donald Trump finally signed the $900 relief package, the next dose of support depends on two special runoff elections in Georgia. Democrats need to win both races to have effective control of the Senate, which will enable them to pass more stimulus. The latest opinion polls show Republican David Perdue and challenger Jon Ossof are neck-to-neck and the same goes for GOP Senator Kelly Loeffler and Democrat Raphael Warnock. Tensions ahead of both races may hold markets back.”