The market risk-off sentiment is now engulfing the financial markets with fears of a resurgence that have prompted high demand for the US dollar.
The US dollar as a safe-haven currency experienced a strong strengthening in the European session yesterday continuing to the New York session surpassing almost all other major currencies.
A major factor driving the market back at risk is concerns over the second wave of Covid-19 which has now re-invaded Europe. The number of daily cases in high-risk countries has previously risen to levels recorded in April and May.
Some local restrictions began to be announced in several different countries.
Meanwhile, the Euro traded declined following concerns over the latest wave of virus attacks. The German Finance Minister has warned that the German debt rate will reach 80% of the Gross Domestic Product (GDP).
ECB President Christine Lagarde also referred to economic recovery as still uncertain and imperfect.
Thus, the price movement on the EUR / USD currency pair chart will continue to decline lower after plunging yesterday.
In yesterday's Asian session, prices began to decline and passed the Moving Average 50 (MA50) support level within the 1-hour time frame of the price movement which signaled a change in the bearish trend earlier.
The daily decline reached 140 pips with the lowest level touching 1.17300 on continuing trading in the European session before closing a slightly higher trade around 1.17600.
The decline that will continue will try to break the support zone at 1.17200 to record the latest low of 9 weeks.
On the other hand, if market sentiment changes again and the price starts to rise again, the SBR (support becomes resistant) zone at 1.18000-1.17800 is likely to be tested first before the price continues to rise higher or fall lower.
The continued increase will lead back to the previous price resistance zone at the level of 1.19000.
