50 SMA Extends Resistance
The EUR/USD was closed at $1.1792 after placing a high of $1.1814 and a low of $1.1803. EUR/USD extended its decline and reached its lowest since April 4 amid the prevailing risk-off market sentiment along with the strength of the U.S. dollar.
The risk-off market sentiment driven by the rising number of coronavirus cases due to the delta variant of coronavirus weighed on riskier assets on Monday. It kept the entire global stock market under pressure. The risky assets like stocks, bonds, and yields remain depressed on Monday as the rising number of cases worldwide could slow down the global economic recovery.
Many countries struggling to fight the fast spread of coronavirus were forced to re-impose lockdown measures as the Delta variant was causing cases to rise at an alarming level. The WHO has also warned that the delta variant was now the dominant strain worldwide. According to U.S. Centers for Disease Control and Prevention, the cases in the U.S. were up by 70% last week, and the deaths were 26%, with outbreaks occurring in parts of the country with low vaccination rates.
The CDC data suggested that the seven-day-average number of daily cases was more than 26,000, more than twice the number in June around 11,000. The renewed economic recovery concerns added safe-haven appeal in the market that pushed the U.S. dollar higher and riskier assets lower on Monday.
Since October on Monday, the Dow Jones Industrial Average dropped to its lowest along with the U.S. Treasury Yields on benchmark 10-year note that continued its decline for 5th consecutive session and plunged to its lowest in 6 months at 1.176%. The risk-off market sentiment added strength to the safe-haven U.S. dollar that ultimately reached above 93 handles, its highest in 4-months, and added weight on the currency pair EUR/USD.
Meanwhile, Europe faced a new coronavirus infection wave as the cases increased and weighed on the single currency Euro. This weekend, Europeans faced last-minute travel restrictions as the U.K. and France re-imposed border restrictions to combat the rising number of infections that were threatening the plans to get life back to normal.
Over the weekend, France reported more than 12,500 new coronavirus cases, and it was the third day that the count came in above 10,000 level. This quick spread of the virus was attributed to the highly contagious Delta variant of COVID-19. The virus woes in Europe disturbed E.U. plans to open up for summer vacations and weighed on single currency Euro that dragged EUR/USD pair downwards.
EUR/USD Intraday Technical Levels
Support Resistance
1.1762 1.1822
1.1733 1.1853
1.1702 1.1882
Pivot Point: 1.1793
EUR/USD - Technical Outlook
The direct currency pair EUR/USD is trading sharply bearish at 1.1785 level, violating the support level of 1.1795. Besides, the Euro has also crossed below 50 SMA (the simple moving average) on the hourly timeframe. This 50 SMS is placing resistance at 1.1800 level and formation of candles below this level, suggesting a bearish bias in the EUR/USD pair.
On the downside, the EUR/USD’s support level prevails at 1.1765 level that’s extended by a double bottom pattern. Breakout of this double bottom pattern can expose the EUR/USD towards 1.1735 support level. All the best!
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