The greenback is close to posting its strongest weekly gain in three months. On Friday, the USD index updated two-month highs around 91.6 points.

The strengthening of the US dollar is taking place against the background of the growth of Treasury yields, due to the increased likelihood of the adoption of the next package of fiscal stimulus in the United States.

Expectations regarding the acceleration of economic growth and the issuance of new debt securities in the country contributed to the fall in the value of US government bonds and an increase in their yield, which increased the attractiveness of the dollar.

Positive statistics on the United States, published ahead of the January NFP report, also supported the US currency.

The weekly release on claims for unemployment benefits in the US reflected growth by less than 800,000, which was the third consecutive decline. ADP previously reported an increase in the number of jobs in the US private sector. The employment component in ISM's reports on business activity in the US manufacturing and services sectors also showed growth.

Experts believe that in January, the number of jobs in non-agricultural sectors of the American economy increased by 50,000. At the same time, the market expects stronger growth by about 200,000.

If the data confirms market sentiment, the impact will be significant. In this scenario, the greenback could react to payrolls with strong rallies, and it won't take long for the EUR/USD pair to fall to new lows and test the 1.1900 mark.

However, too high expectations for the NFP may not be justified, which will lead to profit-taking on USD and a rebound in the main currency pair, which recovered slightly on Friday after a four-day decline.

Earlier, the EUR/USD pair broke through the psychologically important support at 1.2000 and reached the lowest levels since the beginning of December last year near 1.1950.

Recently, the bearish sentiment for the main currency pair has intensified, as market participants drew attention to the fact that the US economy is doing well, while the eurozone is threatened by a double recession.

"Comparative growth dynamics between Europe - weak - and the United States - the best - currently favors the dollar, but this is unlikely to be a long-term topic," said National Australia Bank.

"The US economy is unusually strong compared to other countries, which is causing the dollar to short out. The current dollar gain may continue for several weeks, but then the picture will worsen for it, as Europe and Asia catch up with America in terms of vaccination rates, and the continued super-soft monetary policy of the Fed will limit the growth of long-term profitability in the US, "strategists at JP Morgan said.

Westpac also shares a similar view.

"We expect the spread of the COVID-19 vaccine in Europe to accelerate towards the end of this quarter, which, combined with the Fed's commitment to super-soft monetary policy, will put pressure on the dollar again. We believe that the upside potential is insignificant, especially over time. So sell the USD Index at 92," the representatives said.

As for the main currency pair, according to experts, in the coming weeks, it may well sink to the area of 1.1700-1.1800, but this will only create an excellent opportunity to buy the pair at lower levels.