EUR/USD: Coronavirus fears and US election uncertainty add to pressures

EUR/USD is under pressure as Europe's coronavirus situation is deteriorating rapidly while uncertainty about the US elections is boosting the safe-haven dollar. Wednesday's 4-hour chart is painting a bearish picture, with another support line at risk, FXStreet’s Analyst Yohay Elam informs.

Key quotes

“Europe's largest countries are set to announce new measures as COVID-19 cases, hospitalizations, and deaths are rising quickly, and the euro is suffering. French President Emmanuel Macron is scheduled to address the nation at 19:00 and possibly announce a month-long lockdown. German Chancellor Angela Merkel is also mulling new measures, potentially leaving schools open but shuttering other activities. The ‘locomotive’ of the eurozone has already been slowing down, and another setback is due.” 

“Recent opinion polls have continued showing President Donald Trump trailing behind challenger Joe Biden, yet the surprise from four years ago is on investors' minds. Tighter polls in Florida and North Carolina, published on Tuesday, provide a reminder that the race is decided in several battleground states rather than at the national level. The Economist's model is showing Trump as having only a 5% chance of winning. The battle for the Senate is closer, with Dems' probability at around 73%. Control of the upper chamber is critical for passing a generous stimulus package that markets crave for.”

“Euro/dollar dropped below the 50, 100, and 200 Simple Moving Averages on the 4-hour chart and suffers from downside momentum. The Relative Strength Index is still above 30, thus outside oversold conditions.” 

“Support awaits at 1.1745, which was a swing high in mid-October. It is followed by 1.1720, which was a low wing beforehand. The critical cushion is 1.1685, which is a double-bottom, last seen ten days ago. Resistance is at 1.1785, which provided support last week. It is followed by this week's stubborn cap of 1.1840, and then by 1.1880.”