EUR/USD Soft After Last Week’s Drop
EUR/USD - H1
On Friday, we saw a resurgence of fear around the Covid-19 situation in Europe, as Austria announced full lockdown in order to contain the spread of the pandemic ahead of the holidays, providing sellers the catalyst that was required for fresh 2021 lows.
This came in a backdrop of Fed/ECB diverging rhetoric, as Ms Lagarde had once again pushed back against tightening of monetary policy, while some key Fed officials made the case for faster QE tapering.
EUR/USD remains in a precarious position and risk for lower lows below 1.1240 is high, although it may be early for sub-1.1184 moves.
On the other hand, the pair managed to defend 1.1240 and an effort to reclaim 1.1290-1.1300 could be in the cards, as sentiment looks improved, but the upside seems to have important hurdles. Under current conditions, we struggle to see how it can push through this month's descending trend-line and EMA100 (currently at around 1.1330-5) that will pause the downward momentum.
Today's docket does not feature any major economic releases, but markets will continue to monitor the Covid-19 situation in Europe. Tomorrow, focus will shift ta a series of PMIs. This week, we are also likely to find out if Mr. Powell will remain at the helm of the US Federal Reserve, or if he will be replaced.
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Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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