As we indicated in yesterday’s analysis of the Euro, the pair is currently at a tipping point. The significant support at the 1.1035 level has held for the past 24 hours, which has led to a noticeable disappointment among short traders. Although the bears have made several attempts to crack the 1.1035 level and hoped for an early breakout on the down-side. The Euro has put up a brave fight. Not even the positive economic data released from the U.S. yesterday afternoon was able to weaken the European key currency.
Of course, this does not mean that the danger of further losses is completely off the table. However, the longer the Euro can hold above the 1.10 mark against the US Dollar, the better the chances for a counter-reaction on the upper side. And that is exactly what the long traders will be waiting for today. No matter whether in the European, American or Asian session. Euro vs. US Dollar can be traded around the clock, as the classic stock exchange opening hours in the Forex market do not play a role.
Coronavirus doesn’t affect the Euro
Also the daily increasing number of patients infected with the coronavirus worldwide is of little importance for the foreign exchange market. Even the stock markets have now become used to the negative news from Asia and have experienced a recovery since yesterday. Although no one can yet estimate the damage and the consequences that the new pandemic will have for the global economy. Nevertheless, the financial markets are behaving more calmly. The forex market lives more from short-term fluctuations and the news usually has only a short impact on currency pairs.
How will EURUSD behave today?
Yesterday’s scenario still remains relevant. Most traders will be waiting to see how the Euro performs against the US Dollar at the 1.1035 level. If the support breaks in the coming hours, we will likely see lower prices. The next price target we see is the “big figure” at 1.1000. We should remain cautious here, as the 1.10 is also considered a strong psychological barrier. At this level, there may be increased volatility as many orders are placed in this area. Should this barrier also break today, which is rather unlikely, EURUSD will head for the next important support at 1.0991. This is where the currency pair hits its last monthly low.
However, many traders are expecting the EURUSD to recover soon. If the important resistance at 1.1055 can be conquered, the chart’s technical picture will change and the way up to 1.1100 will be clear. There will certainly be a fierce battle between the bulls and bears here. It remains to be seen who will win. For this reason, it is recommended for longer-term oriented traders to work with trailing-stops. In this way you protect your profits and avoid unnecessary risk.
The EURUSD situation is really exciting right now and we will most likely see a major breakout soon. In such situations, there are of course excellent opportunities to make nice profits in the short term.
Regardless of whether you favor the long or short side for today, the most important thing, as always, is to keep a cool head and consistently follow the money management. Then nothing stands in the way of fun and success in trading.
The analyses shown here do not constitute investment advice. They are therefore not a recommendation to buy or sell a security, futures contract or 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.