• The euro finds support at 1.1640 after a five-day sell-off.
  • COVID-19 lockdowns and the ECB have sent the euro tumbling.
  • The US elections will be a key EUR/USD driver next week.

The euro extended its downtrend for the fifth consecutive day and is on track for a 1.75% weekly decline to close the week near 1.1640 with 1.1610 multi-month lows on sight.

ECB and COVID-19 lockdowns send the euro tumbling

The euro has been hammered this week by market concerns about the increase of COVID-19 infections in Europe and the effect of the social distancing measures to curb them. The new lockdowns introduced by France and Germany and the tighter limitations applied in Italy and Spain are raising the alarm about the impact on the fragile economic recovery.

Beyond that, the ECB hinted on Thursday to the possibility of unleashing new stimulus measures in December to counteract the negative impact of the pandemic, which boosted negative impact on the common currency.

On another note, the risk-averse sentiment triggered by the rise of coronavirus infections in Europe and US and the uncertainty about the outcome of US elections, have favoured the safe-haven USD, which rallied to four-week highs against a basket of currencies.

Next week, the US presidential election will be the main event. The market is pricing in a Biden's victory that might push the USD lower, anticipating the approval of a large stimulus package by the Democrat government. A contested election, however, would increase uncertainty and boost dollar demand on a rush for safety.

Technical levels to watch

EUR/USD

Overview
Today last price 1.1646
Today Daily Change -0.0029
Today Daily Change % -0.25
Today daily open 1.1675
 
Trends
Daily SMA20 1.1774
Daily SMA50 1.1789
Daily SMA100 1.165
Daily SMA200 1.1312
 
Levels
Previous Daily High 1.1759
Previous Daily Low 1.165
Previous Weekly High 1.1881
Previous Weekly Low 1.1703
Previous Monthly High 1.2011
Previous Monthly Low 1.1612
Daily Fibonacci 38.2% 1.1692
Daily Fibonacci 61.8% 1.1717
Daily Pivot Point S1 1.163
Daily Pivot Point S2 1.1586
Daily Pivot Point S3 1.1522
Daily Pivot Point R1 1.1739
Daily Pivot Point R2 1.1803
Daily Pivot Point R3 1.1847

 

 

 

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