The euro-dollar pair updated this year's low once again, having been designated at the 1.1704 level. But at the same time, traders did not dare to storm the 16th figure, after which another downward momentum faded. EUR/USD bulls took advantage of this fact and organized a 50-point upward correction. The dollar went on a break again, allowing traders to play on its temporary weakness: corrective pullbacks are observed in all major dollar pairs. We can say that the greenback became a victim of the trade principle "buy on rumors, sell on facts": the dollar index began to gradually lose its position as soon as the details of the new economic plan of the White House were released.

However, this does not mean that the dollar can be written off. On the contrary, the current corrective pullback can be used as a reason to open short positions with the main target as 1.1700. After all, many fundamental factors still support the greenback, while the upward rebound is more of an emotional nature.

Let me remind you that US President Joe Biden will present a new economic plan in Pittsburgh, which is already being compared with the post-war "Marshall plan". A few hours before the speech, the White House released the main theses of this initiative. Actually, this fact also weighed on the greenback, as the published figures were "at the lower limit of expectations".

So, over the past two weeks, US news agencies reported that according to their insiders, the volume of the infrastructure project was supposed to be from 2 to 4 trillion dollars. Today, the Biden administration announced that it is proposed to allocate $2 trillion 250 billion for this purpose. This amount is very impressive, but, as you know, starting an activity increases one's desire to continue it. Plus, the new Biden plan has been reported for a long time now, so today the White House only confirmed the "truthfulness" of the rumors, without surprising investors with the amount announced.

Can this fact be considered negative? Absolutely not. To some extent, Biden did not meet the clearly inflated expectations, but in general, the 2-trillion budget spending plan is clearly an ally of the US currency. Moreover, this fundamental factor will provide background support for the greenback for quite a long time, especially if the key macroeconomic indicators show positive dynamics along the way. As a result, the market will return to talk that the Federal Reserve will be forced to curtail QE ahead of schedule and raise the interest rate before 2023. A similar situation was after the adoption of the 1.9-trillion package of assistance to the US economy. Fed Chairman Jerome Powell was able to "put out the fire" at that time, offsetting the hawkish rumors. However, as the main US macro indicators increase, price pressure increases and new fiscal stimulus increases, it will be more difficult for the Fed to maintain the dovish line.

But back to the Biden economic plan. As mentioned above, the White House shared their intentions. And so, 621 billion is planned to be spent on the modernization of transport infrastructure, 400 billion on the support of the elderly and disabled, 300 billion on supporting the industrial sector, 213 billion on the repair and construction of affordable housing and 100 billion on the development of broadband networks. The White House proposes to pay for the costs of implementing this project by raising corporate taxes and increasing the tax on foreign profits of companies. According to the calculations of Biden's economic advisers, the project will be fully implemented within eight years, and paid off by raising taxes in 15 years.

Today, Biden will present the first part of the plan (where infrastructure programs are focused). The second part (where, mainly, "social network") will be presented at the end of April. Judging by the accompanying comments of congressmen, the first part of the project is planned to be passed through Congress before the summer holidays. The second part, respectively, in the fall.

Take note that some representatives of the Democratic Party do not support too large budget expenditures and tax increases. While in the Senate (unlike the House of Representatives), the Democrats do not have "spare" votes – with the Republicans, they have a 50/50 ratio + the decisive vote of Vice President Harris. If at least one Democratic senator opposes, the bill will not gain the force of law. By the way, when the previous aid package was adopted, one of the senators had to be literally persuaded for almost 11 hours. In the end, he voted "yes", and the 1.9-trillion-dollar law went to the president for signature. Most likely, a more fierce political struggle will unfold over the new economic plan.

And yet, today, the dollar received a powerful trump card of a fundamental nature - despite all the political concerns, the discrepancy in the context of expectation/reality and the lack of a surprise effect. We can say that this fundamental factor is a delayed action factor – it will still manifest itself, especially if Friday's Nonfarm report turns out to be better than forecasts.

While the European currency is still under pressure from its problems. Among them are the weak vaccination rates, the deteriorating epidemiological situation and the strengthening of quarantine restrictions in key EU countries. For example, Germany has already extended the quarantine, while France may soon declare a nationwide lockdown. The macroeconomic reports are also not impressive. In particular, the data on the growth of European inflation published reflected the weak growth rates of the main indicators. Thus, the core consumer price index slowed to 0.9% (a downward trend is recorded for the second consecutive month), and the main CPI came out at 1.3% with a forecast of growth to 1.4%.

Thus, the EUR/USD pair still retains the potential for further decline. This is also indicated by the technical picture: the price is still located between the middle and lower lines of the Bollinger Bands on the daily chart, as well as under all the lines of the Ichimoku indicator. The nearest target for the downward movement is the 1.1704 mark - this is the current year's low, which coincides with the lower line of the Bollinger Bands on D1.