30.03.202112:30 Forex Analysis & Reviews: EUR/USD and GBP/USD: Biden and CDC warn that another outbreak could occur if people become slack with COVID-19. Dollar bulls expect another price increase in the market.

Euro and pound traded sideways yesterday, mainly due to low market volatility.

Also yesterday, US President Joe Biden and CDC officials warned people that being slack with the coronavirus may cause another outbreak in the US.

"If people stop following basic safety rules, very bad consequences could occur," CDC head Rochelle Walensky said.

Nevertheless, Biden assured there is great progress with vaccination, and over the next five weeks, more retail pharmacies will sell vaccines.

Meanwhile in Europe, Italy Prime Minister Mario Draghi raised the topic of high budget deficit, which could reach 10% of GDP in a year, as successive economic blockages force Italy to increase spending. In mid-April, Draghi will unveil his plan with updated public spending targets, which will also include higher debt levels, taking into account spending in 2021. But considering that real figures may turn out to be higher than expected, along with the fact that according to latest forecasts, the deficit should not have gone beyond 7%, the new prime minister will have much more work than he initially prepared for.

To add to that, the Italian economy is projected to grow just 4.1% this year, lower than the previous forecast of 6%. Last February, Draghi formed a new administration to try to stabilize this, as Italy was among the countries hardest hit by the coronavirus. It recorded more than 100,000 deaths to date, and last year's GDP fell by almost 9%.

Talking about emergency support measures, Vitas Vasiliauskas, chairman of the Bank of Lithuania said the European Central Bank should be careful when easing financial stimulus. He believes that even if the economy recovers from the pandemic, the transition to more standard monetary instruments should be gradual.

The US is facing a similar problem, as many politicians are concerned about too early plans to roll back economic support measures. They remember that back in 2008, the decision of the Federal Reserve to cut support early led to a serious surge in market volatility, which damaged the economy and slowed down the pace of its recovery.

With regards to EUR / USD, the low trading volatility yesterday did not lead to serious changes in the market. But today, the euro may collapse to 1.1715 and 1.1680 if the quote consolidates below 1.1760. If it returns to 1.1802, price should jump to 1.1850 and 1.1930.

GBP

Demand for the pound increased rather strongly yesterday, after the UK government lifted a series of quarantine restrictions. However, the growth was only short-lived and GBP / USD returned trading sideways for the rest of the day.

Obviously, only a break above the 38th figure will result in a jump towards 1.3850 and 1.3915. But if the quote drops to 1.3750, GBP / USD may collapse to 1.3705 and 1.3670.

On the topic of macro statistics, the Bank of England reported yesterday that mortgage applications in the UK fell sharply in February, dropping from 97,350 to 87,669. This is a huge contrast to the rise in mortgage loans, which increased to £ 6.2 billion. Money supply also grew by 0.8%, thereby resulting in an annual growth of 13.6%.

Today, a lot of important reports will be published, and all of them may seriously affect the market. Most notable is the data on German CPI, which economists forecast to rise by 1.1%. Consumer sentiment in the whole Euro area is also important, as is the report on consumer confidence in the US.