EURUSD holding steady below the balance line

25 June, 2020

On Wednesday the 24th of June, trading on the euro closed down. The EURUSD pair dropped by 0.5% to reach 1.1250. From its high of 1.1349, the euro shed a total of 99 pips. The financial market situation took a sharp turn for the worse on the back of news about COVID-19, which stoked fears of a second wave.

In California, Texas, and Arizona, authorities have reported record numbers of new infections, as well as record numbers of hospitalisations. Some other countries also recorded spikes in new cases. New York and New Jersey have imposed self-isolation restrictions on people coming from states with high infection rates. The EU is considering limiting flights from the US.

WHO chief Tedros Adhamon warned that in the next week, the number of confirmed coronavirus cases will reach 10 million. We believe that this figure will be reached this week considering that the current figure is 9.5 million, 5.5 million of whom have recovered.

In other news, the US plans to impose tariffs on goods from the UK, France, Germany, and Spain to the tune of 3.1bn USD, which also took its toll on investors. This is the culmination of a long-running dispute between the US and EU regarding subsidies for aircraft manufacturers.

This all resulted in investors ditching risky assets in favour of the US dollar and yen.

Day’s news (GMT+3):

  • 13:00 UK: CBI distributive trades survey - realised (Jun).
  • 13:30 UK: MPC meeting minutes.
  • 14:30 Eurozone: ECB monetary policy meeting accounts.
  • 15:30 US: durable goods orders (May), GDP (Q1), trade balance (May), initial jobless claims (19 Jun).

In today’s Asian session, traders hit a fresh low of 1.1237. Take note of how the media sways the crowd with its news reports. The situation regarding COVID-19 hasn’t improved at all, but investors believed Larry Kudlow’s claim that there is no second wave and that no more restrictions would be put in place. In actual fact, on the 23rd of June, the US saw 36,120 new coronavirus cases.

Considering that our pair has dropped from 1.1349 to 1.1236 without any pullbacks, the current momentum should be enough to take it to the 112th degree before the US session gets underway. At the time of writing, the euro is trading at 1.1241. Since the 90th degree isn’t providing any significant support, we expect the pair to drop to the reversal zone between 1.1190 and 1.1217.

Expect surges in volatility from 13:30 to 14:30, when the Bank of England and ECB will publish the minutes from their latest meetings. These are causes for uncertainty among both the bulls and bears.

Sentiment on the euro switching to bearish9 Jun, 2020  

The centre of attention is ECB President Christine Lagarde's speech. She already talked about the bank's monetary policy following their meeting...

Christine Lagarde may put pressure on bulls27 Feb, 2020  

According to the forecast, today I am considering a fall down to the 45th degree - 1.0837. There are several reasons for this. The first is that a bearish...

Euro to remain under pressure24 Jan, 2020  

On January 23, the euro was down at the close of trading. Bulls lost ground during the speeches at the ECB meeting, including one from ECB President...

EURUSD: consolidation expected20 Jan, 2020  

Most major currencies are trading in the black, and the economic calendar is scarce. A spike in volatility may be caused by the head of the ECB...

Euro recovers on news from China18 Nov, 2019  

By the end of last week, almost all major currencies closed in the black. The highest growth against the US dollar was shown by the New Zealand dollar...

EURUSD: correction to 1.1060 expected11 Nov, 2019  

On Friday the 8th of November, trading on the EURUSD pair closed at 1.1018. The drop, which started at the beginning of the European session, was mostly...

Euro could drop in response to ECB minutes22 Aug, 2019  

All eyes are on the Jackson Hole symposium, which starts today and will go on until the 24th of August. The heads of central banks will convene...

Gold market upward trend12 Aug, 2019  

When risks increase for the global economy, more and more investors are choosing to place their funds in gold and other precious metals. Even...

Euro recovering on back on the pound22 Mar, 2019  

The pound is showing decent growth today. We're keeping an eye on Brexit news. Barring any negative headlines from the UK or EU, the euro could...