EUR/USD bears failed to seize the initiative and develop a correction to the upward trend amid rising Treasury yields and strong statistics on US retail sales for January. As soon as the ECB announced in the minutes of the last meeting of the Governing Council that the increase in the rates of the European debt market was not a reason to increase QE, but for business activity in Germany and France to please the eye, the bulls came to their senses and renewed their attacks.

Divergence in economic growth is a very powerful driver of exchange rate formation in Forex, because the stronger the economy, the stronger the currency. In this regard, the best dynamics of US retail sales over the past 7 months in January and the increase in forecasts for US GDP growth to 9.5% in the first quarter, it would seem, should have ripped the bulls on EUR/USD to shreds. The eurozone is likely to face a double recession due to lockdowns and slow vaccinations, so where can the euro strengthen?

In principle, everything is interconnected in the global economy. Thanks to China and the US, the export-oriented currency bloc will be able to get up from its knees, and deferred demand at the opening of the economy will accelerate GDP to indecent values. This was already the case in mid-2020 when the foundation was formed under the upward trend in EUR/USD. Investors remembered that story and waited for signals to improve the situation in Europe, and they followed. The German purchasing managers' index in February showed the best dynamics over the past three years, which allowed the European composite PMI to rise.