- Weak Eurozone Economic data
- Euro Selloff
- U.S Economy Recovery Concerns
The EUR/USD pair is on the cusp of a two- day losing streak. Bears are increasingly pushing the pair lower after struggling to hold on to gains, above the 1.13 level. The sell-off has come at the backdrop of surging risk sentiment in the market.
After performing well over the last couple of sessions, the Euro remains under pressure. Dollar strength across the board continues to send the EUR/USD pair low.
Time : 07-10-2020
Pivot : 1.1304
Technical View : Short Below 1.1284
Target : 1.1264 – 1.1223 – 1.1197
Comments : Weak Bearish
Last Price : 1.1270
The Euro has lost considerable ground against the dollar on the European Central Bank downgrading Eurozone economic forecast for the year. The downgrade comes amidst growing concerns over prolonged effects of the COVID-19 pandemic.
While economic data within the Eurozone has improved significantly, they are still a shadow of the pre-coronavirus levels alluding to ongoing contraction. Immediate data indicates that German Exports increased 9% in May to €80.3 billion but still down by 29.7% compared to the same period last year. Imports, on the other hand, increased 3.5% to €73.2 billion but down 21.7% compared to the same month last year.
Dollar Safe-Haven Demand
Disappointing economic data should continue to pile pressure on the Euro as the dollar continues to strengthen across the board as a safe-haven. The greenback continues to attract bids as traders continue to scamper for safety amidst a spike in coronavirus infections. On Thursday, the U.S reported 60,500 new cases, the largest single-day increase in the world.
A spike in coronavirus cases continues to arouse concerns about economic recovery as U.S states turn to lockdowns to control the situation. Goldman Sachs has already warned that additional measures may be needed to curb any pitfalls emanating from the COVID-19 pandemic.
The COVID-19 pandemic continues to rattle the labor sector with unemployment claims having surged to all-time highs. A total of 32.92 million Americans are already claiming unemployment benefits alluding to the dire state of the U.S economy.