The Euro is looking vulnerable in today’s trading session against its US counterpart as markets ponder the uncertainty surrounding the global economic recovery on the back of the new Delta strain of coronavirus.
As global coronavirus cases connected with the Delta variant continue to surge, market participants are not willing to take any risks with many financial instruments and cling to safe-haven currencies like the US Dollar and Swiss Franc.
The European Central Bank monetary policy decision and statement due out tomorrow is shaping up to be major news for the European currency and as things stand now, policymakers are expected to keep the current path by supporting the Eurozone economy and any moves on reducing the central bank’s stimulus program seem some way off.
It is hard to see the Euro making any substantial gains against the greenback over the next month as investors await all mighty Jackson Hole conference from Wyoming in the US where members of the US Federal Reserve may announce the beginning of their tapering program as the US economy continues to improve.
From a technical point of view, the Euro has now racked up 5 straight days of losses and continues to break crucial support levels, and although the bulls were able to defend the $1.1775 mark in yesterday’s trading session, today we have witnessed a significant breakthrough of this crucial level.
In today’s trading session we can see significant pressure being applied to the next support level of $1.1762 and a clean break here would be very bearish news for the Euro/USD currency pair.
Any further disappointing news surrounding the spread of the coronavirus released today may see further losses and a move down towards $1.1711support level and a 4-month low.