EUR/USD drops to fresh eight-week lows, holds above 1.1000
- A firm US dollar across the board weighs on EUR/USD.
- Equity prices down sharply also in Wall Street.
The EUR/USD pair broke to the downside after moving for hours in a 15-pip range and bottomed at 1.1008, the lowest level since December 8. The greenback remains strong despite lower US yields, amid risk aversion.
Risk aversion everywhere
Equity prices in Wall Street are sharply lower, in line with global markets. The Dow Jones falls 1.60% and the Nasdaq 1.95%. The US 10-year yield stands at 1.61%, about to post the lowest close since October.
The spread of the virus in China and across the world raised concerns about the impact on the global economy. Those worries favoured currencies like the yen and the Swiss franc and affected negatively on emerging markets and commodity currencies.
The decline in EUR/CHF also pressured the euro to the downside. The cross fell to 1.0670, the weakest level since 2017.
Technical outlook
The EUR/USD is falling for the third day in a row and approached the 1.1000 area. The negative trend remains in place, but the momentum appears to be fading. The area around 1.0990/1.1000 is a key and strong support that should limit the decline. A break lower would clear the way to more losses.
On the upside, 1.1035/40 (Jan 27 high) is the immediate resistance followed by the 100-day moving average at 1.1065.
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
