EUR/USD drops to near 1.0620 as nations favor safety measures for arrivals from China

  • EUR/USD is facing pressure as fresh Covid measures taken by various nations for arrivals from China trigger volatility.
  • Absence of recovery signs from S&P500 futures after a two-day sell-off portraying risk-off mood.
  • The United States will require all travelers from China to show a negative Covid report, effective from next week.

The EUR/USD pair has sensed heat after a rebound move to near 1.0637 in the Asian session. The major currency pair has dropped marginally around 1.0620 as the risk-off impulse has regained traction after various nations announced the requirement for negative Covid-19 test reports of arrivals from China. This is expected to escalate supply chain disruptions as China is a leading trading partner with various nations in the world.

The US Dollar Index has turned sideways in a range of 104.26-104.40 after a correction in the early trade from a four-day high around 104.56. Meanwhile, S&P500 futures have not displayed any recovery move after a two-day sell-off, portraying a risk-aversion theme underpinned by the market participants. The return on the 10-year US Treasury bonds is facing pressure and has dropped to near 3.86%.

The pace of reopening of the Chinese economy adopted by the respective administration has spiked the number of infections, which has dismantled the idea of easing supply chain disruptions. According to CNN News, the United States will require all travelers from China to show a negative Covid test result before flying to the country, effective from January 5.

Meanwhile, Italy announced that it will commence testing all arrivals from China for Covid and urges European Union countries to follow suit, after the 50% positive test rate on China flights in Milan. Fresh concerns about the Covid situation in China are likely to keep the US Dollar Index on a positive trajectory.

On the Eurozone front, the trading bloc is concluding the CY2022 on a high inflation note, which will keep the European Central Bank (ECB) policymakers busy in finding ways to tame the Consumer Price Index (CPI). This week, ECB Governing Council member, as well as Dutch Governor, Klaas Knot warned for more policy tightening in the five policy meetings between now and July 2023 to contain firmer inflation. He further added that ‘The risk of us doing too little is still the bigger risk’.


Today last price 1.0621
Today Daily Change 0.0013
Today Daily Change % 0.12
Today daily open 1.0608
Daily SMA20 1.0579
Daily SMA50 1.0313
Daily SMA100 1.0118
Daily SMA200 1.0328
Previous Daily High 1.0674
Previous Daily Low 1.0608
Previous Weekly High 1.0659
Previous Weekly Low 1.0573
Previous Monthly High 1.0497
Previous Monthly Low 0.973
Daily Fibonacci 38.2% 1.0633
Daily Fibonacci 61.8% 1.0649
Daily Pivot Point S1 1.0586
Daily Pivot Point S2 1.0564
Daily Pivot Point S3 1.0519
Daily Pivot Point R1 1.0652
Daily Pivot Point R2 1.0697
Daily Pivot Point R3 1.0719



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