EUR/USD reversal from 1.1260 extends to two-week lows below 1.1200
- EUR/USD reversal from 1.1260 extends to two-week lows sub 1.1200.
- Concerns about a second COVID-19 wave boost the USD across the board.
- EUR/USD in a corrective move towards 1.1172 – Commerzbank.
The common currency is going through a steady decline after being rejected at 1.1260 area earlier today, to test levels below 1.1200 for the first time in the last two weeks. The broad-based US dollar strength, which has reached two-week highs against a basket of the most traded currencies is pushing the euro lower.
The dollar strengthens as risk appetite fades
A growing number of infections in the US and news about Beijing’s travel restrictions to stem a new virus outbreak, combined with geopolitical tensions between China and India have crushed market sentiment, boosting demand for safe havens like the USD.
Once again, the market has paid little attention to macroeconomic data which has given mixed signals in the US. The 1.5 million increase on weekly jobless claims confirms the view that the US labor market will need some time to return to pre-pandemic levels. On the positive side, the Philadelphia Fed Manufacturing survey has shown an unexpected increase in activity, to a level of 27,5 from -43 in May.
EUR/USD in a corrective move towards 1.1172 – Commerzbank
According to Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, the euro is on a corrective pullback, heading towards 1.1172 and 1.1124, “EUR/USD is downside corrective and very near-term is on the defensive. Initial support lies at 1.1172, the 38.2% retracement ahead of the one-month uptrend at 1.1124, which is expected to hold the downside.”
EUR/USD key levels to watch