The Euro inched higher on Friday, while posting its first weekly gain in two weeks after the European Central Bank (ECB) reaffirmed its dovish stance in the minutes of its policy meeting on Thursday while the dollar struggled as U.S. coronavirus infections surged.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On Friday, the EUR/USD settled at 1.1219, up 0.0002 or +0.01%.” data-reactid=”13″>On Friday, the EUR/USD settled at 1.1219, up 0.0002 or +0.01%.
ECB’s Lagarde: ‘We’ve Probably Passed the Worst of the Coronavirus Crisis’
Christine Lagarde, the president of the European Central Bank, believes the world may be past the worst of the coronavirus crisis but said a return to the status quo is unlikely.
Speaking during the online Northern Light Summit on Friday, she said: “We probably have passed the lowest point and I say with some trepidation because of course there could be a second wave.”
Lagarde cautioned that the recovery “is going to be incomplete and might be transformational,” iterating that the world won’t be the same after the pandemic.
Some business models will struggle to survive and adapt to the new world, while other firms will be created to address a changed reality, she said. In a world where proximity might take over, Lagarde said “it is likely that trade will be significantly reduced.”
“We need to be extremely attentive to those that are most vulnerable,” she added.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1168 will signal a resumption of the downtrend. The main trend changes to up on a move through 1.1422.
The minor trend is also down. A trade through 1.1349 will change the minor trend to up. This will also shift momentum to the upside.
The main range is 1.1496 to 1.0636. Its retracement zone at 1.1167 to 1.1066 is controlling the longer-term direction of the Euro. The upper or Fibonacci level at 1.1168 stopped the selling on June 19.
The minor range is 1.1168 to 1.1349. Its 50% level at 1.1259 is resistance.
The short-term range is 1.1422 to 1.1168. Its 50% level resistance is 1.1295.
We’re going to start the new week more concerned about the downside than the upside. We feel that if support can hold then the upside will take care of itself.
The first key support area to watch is the price cluster at 1.1167 to 1.1168. Counter-trend buyers could come in on the first test of this area.
This is where it gets tricky. If 1.1167 fails then prices could collapse with the 50% level at 1.1066 the best downside target. It gets tricky because this zone is still support for longer-term traders.
Look for a choppy, volatile trade inside 1.1167 to 1.1066 because short-term trend traders are going to try to push the EUR/USD lower, while long-term value buyers are going to try to form a bottom.
Of course, holding 1.1168 will signal the presence of buyers. They are going to try to drive the EUR/USD over the two 50% levels at 1.1259 and 1.1295. Short-sellers are going to try to defend the trend at these levels.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For a look at all of today’s economic events, check out our economic calendar.
” data-reactid=”43″>For a look at all of today’s economic events, check out our economic calendar.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally posted on FX Empire” data-reactid=”44″>This article was originally posted on FX Empire
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