Today we shall take a look at the EUR/USD currency pair. Last week the trend of this pair turned sharply bearish, before the rate managed to stabilize around the level of 1.1780, which is a low last observed in early November. At present, the pair is trading flat around that value.
The European single currency has fallen on hard times. Despite some uplifting fundamental data released last week, the euro is under heavy pressure by the coronavirus pandemic. Covid-19 is rampant in Europe, a third wave of infections sweeping a continent that failed to adapt and prepare compared to countries like the United States or the United Kingdom. The EU is extremely behind on its own vaccination goals. For comparison, Germany, France, and Italy together have administered fewer jabs than the United Kingdom. Due to the slow vaccine rollout, millions of people remain vulnerable to the coronavirus, which is showing as hospitals fill to bursting again. As a result, EU member states are entering or extending their lockdowns and tightening the restrictions on businesses and people in order to contain the virus. This will continue to pressure the euro as a result, because other economies are already moving towards recovery while the EU remains in crisis mode.
Meanwhile, the US dollar is benefiting from everything that is weakening the euro, because of the large disparity between the US and the EU at the moment. Joe Biden’s administration has already met its initial vaccination goal and set a new one last week that it will likely also meet. Daily Covid-19 infections and hospitalizations alike are down in the US and the country seems in a great position to lead the global economic recovery from the pandemic. Thus, the dollar will remain stable and strong against the euro, with fundamental reports taking a back seat for the time being due to the importance of the pandemic.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1790, with the price currently trading below it. The daily support levels lie at 1.1778 (overcome) and 1.1771. The daily resistances are located at 1.1794 and 1.1802. The indicators of technical analysis agree in strongly recommending a sell position today.
