- Slow Eurozone Economic recovery
- Dollar Safe Haven Demand
- Thin economic Calendar
EUR/USD pair was flat, Wednesday morning, after a volatile choppy session on Tuesday. The pair retreated from highs of 1.133, the 1.14 mark having merged a critical resistance level curtailing upside action.
The pair has remained confined in a tight trading range over the past four weeks, with the 1.133 emerging a crucial hurdle and the 1.1200 a crucial support level curtailing downward action.
Time : 07-08-2020
Pivot : 1.1284
Technical View : Short Below 1.1264
Target : 1.1244 – 1.1221 – 1.1189
Comments : Weak Bearish
Last Price : 1.1285
The Euro has come under pressure against the dollar, continuing to attract bids given its safe-haven status. While economic data within the Eurozone has improved significantly, it is still a shadow of the pre-corona levels.
Eurozone economic recovery has so far disappointed weighing significantly on the Euro sentiments in the market. For instance, Germany’s Industrial output rose by 7.8% in May, way below expectations. Factory orders also came below expectations despite advancing by 10.4%.
The EUR/USD dollar has struggled to hold on to gains above the 1.13 level as the dollar continues to strengthen amid a spike in risk aversion in the market. The risk of a second wave of coronavirus infections taking a toll on economic activity in the U.S has forced traders to rush to safe-haven to hedge against potential losses.
Conversely, the EUR/USD has resorted to trading in a range despite economic data signaling the Eurozone economy is on a recovery path with the opening of the economies. Amid a relatively light economic calendar for the week, the pair look set to trade in a range with the COVID-19 pandemic, the main tailwind likely to fuel volatility in the forex market.
Looking ahead, traders await a speech by European Central Bank speaker Guindos. Likewise, a speech from the Bundesbank Buch could sway traders’ sentiments on the Euro conversely influence EUR/USD price action.