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#1 19-03-2020 18:55:39

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: pair continues to drop, are we headed toward new annual lows?

EUR/USD: the pair continues to drop, are we heading towards new annual lows?


The pair remained under pressure yesterday as part of a bearish trend that has now lasted for 11 days.

The euro is currently novering around yesterday's low of 1.0682, a level that should be considered as immediate support, below the 2020 low of 1.0778.

The main factor behind the euro's fall is the strengthening dollar, as a flight to safety as the coronavirus pandemic continues to panic financial markets, especially European ones.

In addition, the scale of the epidemic in Europe and the massive stimulus and support measures that governments are beginning to put in place imply a risk of dangerous fiscal slippage, especially as a recession is certain.

In other words, a new debt crisis, with the risks of a eurozone break-up that this implies, could occur, which could keep considerable pressure on the European currency.

Now, in addition to the news related to the spread of the coronavirus, traders will need to take into consideration a few statistics in the U.S. economic calendar.

From a technical point of view, the UOB bank noted this morning: "We were expecting a weakening of the euro, but we felt that the 1.0900 support was probably out of reach. However, the euro plunged to 1.0800 before recovering. Although heavily oversold, this rapid decline is not yet showing any signs of slowing down. In other words, it is too early to expect a sustained rebound. The EUR needs to move all the way back above 1.1025 (minor resistance is at 1.1000) to indicate that the current weakness has ceased. In the meantime, the euro could return to the 1.0800 level, perhaps even testing last month's low of 1.0775."

Currently, the EUR/USD pair is trading at 1.0682 on the forex.

Hourly EUR/USD chart

http://www.forex-central.net/forum/userimages/EURUSD-H1.png




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