In yesterday’s trading session, the Euro continued its temporary rebound. In the morning, the bulls tried with all their might to push the rate higher. The target was the 1.0900 level, but this level was not reached yesterday. The Euro ran out of steam in the range of approx. 1.0885. The follow-up orders were missing and the long traders closed their positions. It was a clear sign for many traders to favour the short side from now on. The exchange rate of the Euro vs. the US Dollar then moved almost solely downwards. In the low the pair reached the mark of 1.0745.
The euphoric mood on the securities markets yesterday failed to infect the Euro. Although the DAX gained a sensational 11%, the Euro moved relatively little against the US Dollar. One of the reasons for this was certainly the fact that the reactions in the securities markets were emotional. The situation in Europe has not changed since yesterday. The corona crisis is still there and the outlook for the coming weeks and months is rather gloomy for the German and European economy. Although the DAX put some investors in a buying mood yesterday, you should not be mistaken. It was a quite natural counter-reaction, which was to be expected sooner or later after the harsh losses of last week. This does not mean that the worries and fears are now gone. The current economic data that is reaching us from the Eurozone is anything but positive. Yesterday, the Purchasing Managers’ Index was released and it turned out to be lousy.
The coronavirus continues to spread in Europe. Not only in Italy, many hospitals are now completely overcrowded and patients are being refused treatment. Sad news also reaches us daily from Spain. The health system there is on the verge of collapse. There is a shortage of medical equipment, but above all a growing shortage of staff. The dramatic conditions in the old people’s homes clearly show that the country is completely overwhelmed by the corona virus. The Spanish government in its desperation is already asking NATO for support. The experts expect the number of victims to continue to rise in the coming days. This is because the peak of the pandemic has most likely not yet been reached. It is likely that this will further dampen the mood for the Euro.
The possible scenario for the Euro against the US Dollar for today
Currently (Wednesday morning) the Euro vs. the US Dollar is at 1.0811. In the Asian session tonight the pair was able to gain slightly. However, the market was quite calm and volatility was absent. The Far Eastern stock markets all showed themselves from the friendly side. The Nikkei 225 closed trading at +8.13%.
For Euro vs. US Dollar it will be important today if the pair can defend the 1.0800 level. If it succeeds, the bulls will certainly try to push the price up further. The first target price today is the 1.0865 range. Should this mark also break, the price will want to see the 1.0900 “big figure”. But the air will be thin here. So anyone with a short-term orientation should close their long positions at this level. If, on the other hand, the range at 1.0800 is broken, the bears will attack the short side again. On the underside, the EUR/USD is waiting for the first important support at 1.0770 and the next one at 1.0745. The Daily Pivot Point for the Euro against the US Dollar today is 1.0810.
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.