Today we shall take a look at the EUR/USD currency pair. After the surprise recovery in the pair witnessed between late February and early March, the trend turned decidedly bearish and pushed to three-year lows.
The euro right now is facing immense pressure. The global coronavirus pandemic is going to cause great damage to the economy of nearly every country in the world, but as the eurozone was already fragile, and the euro was under pressure even before the pandemic began, Europe is being particularly hard-hit by Covid-19. The ECB has restarted its aggressive asset-purchasing operations in an attempt to control the situation. Nevertheless, we expect the pressure of the coronavirus to weigh down on the euro for at least a couple of months, and for the euro to weaken against the dollar as a result.
The United States has also been severely affected by the coronavirus. The complicated healthcare system in the States, the lack of enough testing kits, and Trump’s administration’s delayed response to the crisis (the President initially dismissed it as a hoax) have led to a rapid increase in Covid-19 cases in the country. Still, decisive action from the Federal Reserve, and the fact that the US economy is the strongest in the world, are keeping investors’ hopes that the United States will feel the pressures of the pandemic less. Thus, interest in the dollar remains strong, causing the value of the USD to grow.
In terms of the daily chart, today we have a pivot point for the pair located at 1.0682, with the price currently trading above it. The daily support levels lie at 1.0644 and 1.0599. The daily resistances are located at 1.0727 and 1.0765. The indicators of technical analysis strongly recommend a sell position today.
