Dollar retreats from highs ahead of Yellen's testimony
Asian equity markets mostly rallied with risk appetite spurred as trade picked up from Monday’s holiday.
EUR/USD: as low as three years ago
Information is not investment advice
Key indicators
Performance in 2020: -2.6%
Last day range: 1.0862-1.0923
52-week range: 1.0862-1.1338
Where does the support level come from?
It comes from spring 2017, almost three years ago. That’s how low the EUR/USD trades now. Therefore, if things keep going as they do now for this currency pair, you will have to hang your support levels in the “emptiness downstairs”. Unless you prefer looking at a weekly timeframe.
Why so bad?
The realistic answer to this question is that there are no solid factors to support the euro. In the meantime, those against it are numerous. Weak domestics growth in the Eurozone, questionable monetary policy line on behalf of the ECB, gloomy perspective of the outcome of the Brexit transition period, a significant probability of trade tensions with the US – you name it. The USD, on the contrary, has an 11-year continuous expansion of the American economy, strong labor indicators, notable resilience of the stock market even despite the Coronavirus, and justified actions of the Fed as presented by Jerome Powell this week. As you can see, it is little surprise that the EUR/USD has dropped to where it has not been for the last three years. And there is a high likelihood that we are yet to see it further down.
Technical levels
Resistance 1.0923
Support 1.0840
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Dollar retreats from highs ahead of Yellen's testimony
Asian equity markets mostly rallied with risk appetite spurred as trade picked up from Monday’s holiday.
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Look at the H1 chart for USD/JPY - is it not a perfect example of a reversal in the resistance zone?
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