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EUR/USD Plummets Across The Board
- EUR/USD plummeting across the board below 1.0850
- Speculation on whether buyers will regain control of the situation
One of the major headlines in the Forex market has been heavy selling pressure on the EUR/USD pair. Over the year, it managed to refresh its 2020 low, as well as print another new multi-month bottom. It is now trading around the 1.0800 handle. Such a move could be explained in the context of a risk-on sentiment that has been triggered in the last few days. However, concerns regarding the spread of Coronavirus have been hurting the sentiment.
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On its way to reaching 1.0700
A strong breakout of a bullish trend line drawn at the end of December 2019 pushed the common currency to post new lows and both 50 and 200 SMA have been guiding the path up to now. The bears have been highlighting a series of bearish patterns, plus an impulsive move that still favors the downside in the near-term.
A break below the 1.0800 psychological level should open the doors to test the 1.0742 zone, which is the next tough nut to crack. If it gives up, then another leg lower is likely to happen towards the 1.0682 region in the first degree.
Will the buyers regain control of the situation?
When the pair manages to consolidate below the aforementioned level, further downside acceleration should be triggered. After that zone is cleared out, it’s expected to fall to the 1.0591 level. However, this should not yet rule out a rebound at the current stage. If EUR/USD manages a leg higher above the 1.0880 resistance level, then it can rally towards 1.0946.
If it gives up in favor of the buyers’ force, a run-up could target the 200 SMA at the H4 chart, which could act as a dynamic resistance. After such a level is broken by the bulls, the focus will shift towards the 1.1102 level. Technical oscillators are showing negative readings, with the RSI indicator hovering below the 50 level. Momentum is also showing a deacceleration of the bullish impetus.