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EUR/USD: instrument continues to decline globally for OANDA:EURUSD by KirkBarton

Current trend

The pair EUR/USD continues to decline amid heightened market concerns about the spread of new strains of coronavirus. The instrument is currently trading at 1.1862.

In addition to the new restrictive measures that have been introduced in some EU countries since the beginning of the week, the greatest pessimism among investors is caused by the policy of the ECB. The head of the regulator Christine Lagarde during yesterday’s interview noted the effectiveness of the monetary policy , so there is no talk of starting to roll back quantitative easing. On the contrary, the ECB announced a new emergency asset purchase program (PEPP) for next year.

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The US dollar index continues to trade at the levels reached in mid-June, at around 92 points, demonstrating absolute neutrality in relation to other world currencies. Investors today are focused on the data on the US consumer price index for June. Analysts expect the monthly growth rate to slow down to 0.5%, and the annual rate to 4.9%, which is in line with the recent comments of the US Fed about the imminent start of inflation decline.

Support and resistance

On the global chart, the price continues to decline, forming a “head and shoulders” pattern. Technical indicators keep a sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram is trading deep in the sell zone.

Support levels: 1.1787, 1.1703.

Resistance levels: 1.1893, 1.1988.

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