EUR/USD to tank towards 1.16 as Europe set to maintain tighter restrictions for longer – MUFG

FXStreet Team FXStreet

Over the past month the EUR/USD pair has continued to correct lower hitting a year to date low yesterday of 1.1704. The euro has now declined for three consecutive months against the US dollar and is set to suffer further weakness as more restrictions delay outlook for stronger recovery in the eurozone, as reported by MUFG Bank.

Euro has become more undervalued vs. USD again

“The next key technical support level is provided by the lows from last autumn at just above the 1.1600-level. Momentum strongly remains in favour of further euro weakness in the near-term.”

“Developments yesterday highlighted that relative cyclical drivers are set to remain a weight on the euro in the month ahead. French President Macron announced a third nation-wide lockdown in response to the accelerating spread of new COVID variants. Italian President Draghi also announced yesterday that the government will extend current restrictions in place on movement and business openings in high-risk areas until the end of 30th April.”

“The US economy is already re-opening more quickly which is helping to boost confidence in the economic recovery outlook. Building expectations for a widening divergence in performance between the eurozone and the US economies provides a compelling argument in favour of further euro weakness in the month ahead, although the euro has already become more undervalued again in recent months as negative cyclical developments have been priced in.”

Author

FXStreet Team

FXStreet

EUR/USD challenges 1.1800, multi-day lows

EUR/USD comes under extra selling pressure, slipping back toward six-day troughs near 1.1800 at the beginning of the week. The pair’s decline comes in response to marked gains in the US Dollar, as investors continue to digest the so-called “Warsh trade” and assess the latest US ISM Manufacturing prints.

GBP/USD stays on the back foot around 1.3650

GBP/USD adds to Friday’s losses and retests the 1.3650 region on Monday. Indeed, Cable’s retracement reflects the ongoing solid performance of the Greenback, while traders also begin to turn their attention to the upcoming BoE meeting.

Gold looking to stabilize below $4,700

Gold remains under heavy pressure in quite a negative start to the week, hovering around the $4,600 region per troy ounce, down for the third consecutive day. The yellow metal’s decline comes amid strong gains in the US Dollar and a broad-based rebound in US Treasury yields.

XRP holds near support amid low retail interest and weak on-chain metrics

Ripple (XRP) is trading above $1.60 on Monday, attempting to recover from last week’s sharp decline that tested support at $1.50.

Warsh effect ripples through markets, central banks on deck this week

The first full month of the year is behind us, and, honestly, it has been rather more dramatic than most had anticipated when toasting the New Year. We wrapped up last week with US President Donald Trump announcing his Fed Chair pick.

Ripple steadies after sell-off as low on-chain activity, retail interest weigh

XRP rebounds from last week’s support at $1.50 but struggles below resistance at $1.77. Active addresses on the XRP Ledger dropped below 18,000 on Sunday amid risk-averse sentiment. Retail interest in XRP continues to decline, with futures Open Interest dropping to $2.81 billion.