InstaForex

July 8, 2021

Falling Into 1.1800 Support Zone, EUR/USD Records Latest 3 -Month Low

 The US dollar was seen to be able to maintain its strength after the minutes report of the FOMC meeting published earlier this morning became the focus of investors.


Based on the minutes, there were no new indications of a period of reduced asset purchases (tapering) by the central bank while some policymakers saw uncertainty in the economic outlook start to pick up after some of the latest data was published.


Investors are also beginning to be wary of the US dollar's re-depreciation situation following a sharp fall in the US 10-year treasury yield to 1.30%.


Risky market sentiment is seen as still a factor supporting the strengthening of the US dollar as a safe-haven currency.


This also put pressure on the struggling Euro currency after published German economic data gave a picture of a difficult economic recovery in Europe.




On the chart of the EUR/USD pair, it can be seen that the price continues to record the latest lows for this week reaching the support zone 1.18000-1.17800.



Prices that are still moving below the Moving Average 50 (MA50) barrier level in the 1 hour time frame of permanent price movement give a signal for a downtrend.


The slow price movement continued at the beginning of the Asian market session this morning (Thursday) hovering at the support zone below the 1.18000 level.


The lower price drop is expected to head to the support level around 1.17200 if the US dollar manages to maintain its strengthening momentum.


On the other hand, if the US dollar weakens again, a rebound above the 1.18000 level beyond the MA50 barrier will push expectations for the price to return to the SBR (support become resistance) zone at 1.19000.