EUR/USD Forecast: Next relevant support is the 1.0680 area

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0806

The ECB announced an emergency €750 billion aid package but was not enough.
EU and US data came in worse than anticipated, effects of coronavirus on economy starting to show.
EUR/USD at risk of falling further despite the latest bounce.

The EUR/USD pair has fallen below the former yearly low of 1.0777, trading at its lowest in almost two years, quickly approaching the 1.0700 level ahead of the US opening. The coronavirus pandemic continues to take its toll on global growth and financial markets, with more central banks injecting huge amounts of liquidity to try to counter it.

The ECB announced late Wednesday an emergency €750 billion "pandemic emergency purchase program" (PEPP) to buy private and public sector securities, which gave the pair some temporal support, sending it to 1.0981 early Asia. Demand for the greenback, however, prevailed. There were also talks making the rounds about Germany planning an emergency package of €40 billion to support small businesses and self-employed.

Germany released an unexpected preliminary estimate of the March IFO Business Climate, which fell to 87.7 from 96. The US, on the other hand, published Initial Jobless Claims for the week ended March 13, which jumped to 281K much worse than the 220K expected. The Philadelphia Fed Manufacturing Survey was also a big miss, down to -12.7 from 36.7 previously.

EUR/USD short-term technical outlook

The EUR/USD pair has reached a daily low of 1.0725, now trading in the 1.0800 region. The short-term picture is bearish, with scope to extend the slump during the upcoming hours. In the 4-hour chart, the pair is currently developing below all of its moving averages, with a firmly bearish 20 SMA, now crossing below the 200 SMA, both around 1.1010. Technical indicators in the mentioned chart have eased their bearish momentum, but hold near oversold levels. Below the mentioned low, the next relevant support and a possible bearish target is the 1.0680 price zone, where the pair has relevant weekly highs from April 2017.

Support levels: 1.0725 1.0780 1.0740

Resistance levels: 1.0800 1.0835 1.0880

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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