EUR/USD suffers virus reality check, critical support at 1.1780 in danger
Reality bites – while a vaccine serves as a light at the end of the tunnel, that glimmer remains far and insufficient to guide those walking in the darkness.
In other words, while Pfizer’s breakthrough achieving immunization is substantial, it may take time for a full solution, and COVID-19 is ravaging the northern hemisphere. The damper mood – after Monday’s euphoria, is weighing on .
The old continent continues grappling with COVID-19. The latest major development is that Italy slapped restrictions on additional regions and is under pressure to announce a nationwide lockdown. Italian Prime Minister Giuseppe Conte has to deal with protests against further measures that choke the economy. In Germany, which announced a relatively light shuttering, cases and deaths continue rising.
The situation in the is also deteriorating. . Not only are infections and mortalities rising, but hospitalizations have reached an all-time high and some facilities are strained. Nevada’s governor asked his residents to stay at home, but so far refrained from making it obligatory.
The virus is grabbing the headlines as the elections are somewhat moving out of focus. President-elect Joe Biden has continued his transition plans as additional votes are being counted. President Donald Trump continued making unsubstantiated allegations of fraud and refuses to concede. Official figures are likely only toward the end of November.
, President of the European Central Bank, will speak later in the day. She may comment on the vaccine but is unlikely to back down from her intention to expand the bond-buying scheme.
The focus may begin shifting to economic performance rather than politics.
Bank holidays in France, the US, and Canada imply thinner trading volumes and lower liquidity – and these may serve as conditions for erratic moves.
EUR/USD Technical Analysis
Momentum on the four-hour chart has turned to the downside, a bearish development. Euro/dollar is approaching critical support at 1.1780, which was a swing low earlier this week and also a cushion in late October. Moreover, it is where the 100 Simple Moving Average hits the price.
Below 1.1780, the next line to watch is 1.1760, which is the confluence of the 50 and 200 SMAs. Next, 1.1720 and 1.17 are noteworthy.
Resistance is at 1.1830, the daily high, followed by 1.1860, a swing high from last week. Further above, 1.19 and 1.1920 await EUR/USD.