Coronavirus-related fears are once again ruling the world. After Bloomberg reported a possibility of new anti-COVID restrictions in Europe, the Netherlands-style, many investors rushed off to “safe haven” assets to avoid risks.
Is Europe likely to introduce more lockdowns? No one should exclude this possibility and this fact provides the “greenback” with huge support, keeping the demand for the American currency quite high.
Another thing in favour of the USD is the Fed’s intention to quickly taper the QE programme and start discussing the rate hike as early as June 2022.
In the H4 chart, EUR/USD is correcting downwards to reach 1.1200 and may later consolidate there. If the price breaks the range to the upside, the market may start a new growth with the target at 1.1291. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving below 0 and may later continue falling towards new lows.
As we can see in the H1 chart, EUR/USD is forming another descending structure with the short-term at 1.1213 and may later start a new correction towards 1.1280. After that, the instrument may resume falling and finish this descending wave at 1.1200. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is moving above 80, which means that the asset may complete the ascending structure soon and the line may continue its movement to reach new lows.
By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.