EUR/USD stalls on the downside ahead of 1.12

  • EUR/USD has fallen over half a percent on Friday as US dollar strength persists.
  • The pair bounced off the support zone ahead of the 1.12 level.

EUR/USD daily chart

After meeting resistance at 1.14 EUR/USD has fallen over 2 big figures in the last three sessions. On Friday the pair looked like it was ready to test 1.12 but there is a resistance zone at 1.1225 that the price just could not break. 

In the future, there could be some momentum for the price to break lower. If that is to be the case then the next support is at 1.1150. The risk tone next week will be an important factor and as the equity market continues to fall a move into cash seems to be the favoured trade. 

The indicators look to be turning bearish too. The Relative Strength Index has pulled away from overbought levels. The MACD looks like the signal lines are about to crossover. The histogram, however, is firmly in the green and it could take the whole of next week for it to change over.

With the political situation slightly calmer in the EU and the central banks and governments seem to be supporting the recovery. The EUR seems to be slightly better supported compared to some of its other counterparts like the pound. If the COVID-19 situation improves in the US again maybe this pair is not the best pick of the bunch on the short side. Either way for now if the situation worsens in the US the demand for the USD could continue and EUR/USD might still have some room to the downside.

EUR/USD price stall

Additional levels

Posted in FX