On Wednesday, the rebound in global risk appetite exerted pressure on the dollar. Moreover, strong retail sales indicators did not support it. Today, the bearish trend is not relevant as the greenback is gradually recovering. Currently, a new rally of the US currency is out of the question. However, long-term decline, except for a slight correction, is not likely. There are at least two major factors that can protect the dollar from decline.

Firstly, it is geopolitical tension. The markets will recover at times, as on Wednesday. Moreover, Ukraine's issue is unlikely to be resolved quickly. It will definitely become a long diplomatic game. Therefore, there will be ups and downs in the short-term, depending on the political tone. Until this issue is at least a little clarified, the dollar will receive support.

Secondly, the dollar's dynamics will be affected by future US monetary policy tightening. Markets expect a 50bp rate hike in March. That probability is now estimated at 50%.

This factor is not conducive to a significant rally. However, it could provide support in new rounds of the US currency index fall, which is happening at the moment. Thus, the level of 95.50 may again act as the key level, not allowing the bears to take the initiative.

As for the EUR/USD pair, there is no reason to leave the range of 1.1300-1.1500. It will most likely be relevant in the coming weeks.

The Fed's minutes, issued on Wednesday, were not positive. On the contrary, investors adopted a more hawkish stance on quotations compared to the US regulator. Notably, some representatives of the Central Bank are willing to end the quantitative easing programme earlier than it was planned.

Both the US and eurozone statistics turned out to be positive. These periods are usually favorable for the EUR/USD exchange rate. Considering the fact that the COVID-19 pandemic is coming to an end, the US and EU indicators will gradually improve. The euro will have an advantage over the dollar as the EU economy still demonstrates a great potential for recovery in the service sector, mainly tourism.

However, the upcoming US Treasury offerings will matter in the coming week. An auction for 30-year inflation-protected bonds is scheduled for today. Then, 3-, 5- and 7-year banknotes will be allocated on February 22, 23 and 24. Volumes should be announced tentatively by the end of this week. Therefore, the dollar's significant drop is unlikely.

At the same time, the outlook for the euro has changed too. Despite the definite advantage of the greenback in some cases, the European currency has not been declining significantly. So, the forecasts are more optimistic. The euro will likely test 1.1500 again. However, the upward movement is limited, the euro needs sufficient reasons to overcome this barrier.

Moreover, geopolitics poses a new risk for the euro. It sharply declined after the news on possible military intervention. The euro is considered a stable currency. Therefore, it was surprising that it reacted immediately to geopolitics. As these events are very difficult to predict, it makes no sense to make any predictions concerning the euro with regard to geopolitics. Notably, there is a new factor to put pressure on the euro. Besides, the euro could fall again in the short-term under certain circumstances.