EUR/USD: the trend remains on the decline, 1.10 threshold is in sight

The bias remains sharply bearish on the pair this morning, after the pair had already lost ground throughout last week, reaching a low of 1.1019 at the end of last week, the lowest since the beginning of last month.

The euro remains close to its Friday lows against the USD, currently trading at 1.1020.

Last week, the euro was penalized by the ECB meeting, during which no hawkish signals were in sight, disappointing traders as economic data had improved since the previous meeting.

However, the pair had also suffered greatly from a generalised climate of risk aversion in the face of the risk of China's corona virus.

As such, this week's focus will remain on this topic as the situation worsens, but traders will also need to take into account a very busy economic calendar.

Indeed, we will be expecting the German IFO Business Climate index and US New Home Sales today, followed by Durable Goods Orders and US Consumer Confidence tomorrow, the Fed meeting on Wednesday evening, the US Q4 2019 Preliminary GDP on Thursday, and the Euro-Zone's January Preliminary CPI at the end of the week.

Faced with such a schedule, it is therefore possible that volatility will be the order of the day this week, and that concerns about the coronavirus will be relegated to the back burner, especially since it should be noted that the pair didn't fall when the market reopened, despite the worrying figures released over the weekend regarding the virus.

Technical factors to keep in mind this week

Technical factors, which played an important role last week, will also have to be taken into account in the coming days. In this regard, and for the record, the pair had sent a major bearish signal by breaking below its 100-day moving average.

A continuation of the decline towards the key psychological threshold of 1.10, or even towards the lows of late November at 1.0979 are therefore possible. If, on the contrary, the eurodollar pair manages to rebound, the 1.1063 threshold, where the 100-day moving average is located at, will be the first resistance level to be taken into account, ahead of the psychological threshold of 1.11.

Currently, the pair is trading at 1.1020 on the forex.

Daily EUR/USD chart