EUR/USD down it goes… in 2020 lows around 1.0930
- EUR/USD loses the grip and drops to lows around 1.0930.
- The pick-up in the demand for USD weighs on the spot.
- Next support of note comes in at 1.0879 (2019 lows).
Sellers continue to hurt the European currency at the beginning of the week, with EUR/USD now reaching fresh yearly lows in the 1.0930/25 band.
EUR/USD offered on USD-buying
Another day, another drop in the pair, which is now navigating the area last visited in October 2019 around 1.0930/20 on the back of renewed buying interest surrounding the buck.
In fact, the spot has quickly reversed the initial (mild) optimism and has resumed the broad downtrend, as sellers regain control of the markets. In the meantime, the bearish view remains well in place around the pair, with futures signalling that a deeper pullback stays on the table,
In the docket, Italian Industrial Production figures reflected the miserable momentum of the sector after contracting at almost 3% during December. On the positive side (if any at all), the Sentix Index came in above estimates at 5.2 for the current month although lower than January’s 7.6 reading.
Across the pond, investors will look to speeches by FOMC’s Bowman, Daly and Harker in the absence of data releases.
What to look for around EUR
The pair accelerated the recent breach of the key support at 1.1000 the figure and remains entrenched into the negative ground so far this year, falling to levels last traded in early October 2019 around 1.0940. As usual, dynamics around the buck are expected to remain the exclusive driver of the pair’s price action for the time being along with alternating risk appetite trends in response to developments from the Wuhan coronavirus and the US-China trade scenario. On another front, the ECB is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change of the monetary policy before that time pretty flat. Further out, some better-than-expected results in the euro region as of late seem to have lent support to the idea that the bloc could have left the worst behind, although that view looks premature, to say the least.
EUR/USD levels to watch
At the moment, the pair is losing 0.10% at 1.0932 and a breakdown of 1.0927 (weekly/2020 low Feb.7) would target 1.0879 (2019 low Oct.1) en route to 1.0569 (monthly low Apr.10 2017). On the other hand, the next up barrier aligns at 1.1013 (10-day SMA) seconded by 1.1065 (100-day SMA) and finally 1.1094 (weekly high Jan.31).