The Euro against the US Dollar has shown a positive development in the last week. The european currency was able to clearly assert itself against the US Dollar. The Euro continued to gain strength on Friday, even though many traders closed their long positions before the weekend. The profit taking was only felt for a short time in the morning. After the support was able to hold at 1.0960, the bulls immediately attacked the long side again and gave the Euro a fresh boost. The price rose more than 150 pips again at the end of the week and was trading at a high of 1.1145.
On Sunday evening, the pair started the new trading week with a small gap on the bottom, which was closed again quite quickly. In the Asian session tonight, traders tried to break above the 1.1145 level, but the attack failed for the time being. Subsequently, a slight disappointment was felt in the market, which resulted in a price drop of about 50 pips.
Corona crisis weakens the US Dollar
Since last week, the USA has been considered the epicenter of Covid-19. The dramatic situation currently prevailing in some parts of the country clearly shows that the coronavirus will have unforeseeable consequences for the US economy as well. Unemployment is rising massively and more and more people are no longer able to meet their financial obligations. Although Donald Trump has promised financial support to almost all citizens, more and more Americans are falling into distress and despair. The cities of New York and New Orleans seem to be most affected by Covid-19. Nevertheless, the US president has decided not to seal off these cities. Donald Trump announced in his press conference on Sunday evening that the protective measures would be extended until the end of April for the time being. He also estimates that there will be about 100,000 deaths in the USA.
According to Johns Hopkins University, there are currently 142,502 people infected with the corona virus in the USA. 2,506 have already died from the virus. The experts assume that the peak will reach the USA in the next few weeks. It is therefore likely that the US Dollar will remain weak against the Euro and the other major currencies.
The outlook for the Euro against the US Dollar
Currently (Monday morning) the Euro vs. USD is trading at around 1.1075. The price is correcting slightly, but volatility is still quite low. The Far Eastern securities markets have performed negatively on a broad front tonight. Both the Nikkei 225 and the Shanghai Composite and Hang Seng were in the red.
From a technical perspective, the Euro is in overbought territory against the US Dollar. Indicators in the medium term are already in the extreme range and are likely to turn around soon and generate fresh short signals. A correction on the downside will be due. How far it will go will depend in part on the fundamental news situation. The first significant support for the EUR/USD is at 1.1030. Here the pair meets the 23.6 Fibonacci retracement and the 420 moving average. So it is a double support which will probably absorb the price. Should this also break, the price could fall further to 1.1000.
If the Euro unexpectedly continues to rise, it will head for the next major resistance at 1.1100. If this mark is conquered, the bulls will want to attack the last high at 1.1145. However, this area will not be easy to conquer. The Daily Pivot Point at the Euro vs. the US Dollar is at 1.1079 today.
The analyses shown here do not constitute investment advice and are therefore not a recommendation to buy or sell a security, a futures contract or any other financial instrument. Past performance is no guarantee of future results. The analyses provided are for information purposes only and cannot replace an individual consultation. Liability for direct or indirect consequences of these suggestions is therefore excluded.