The US dollar is storming across the board, and one of the weaker opponents is the euro. This is not the only reason for the fall of the pair.
EUR/USD continues lower, falling below yet another round number and hitting a new low of 1.0783. The next support line is getting close.
The 3 specific factors weighing on the euro are:
- US dollar domination: The greenback is storming the board as expectations for a rate hike in June take hold. The latest NFP report had its weak points, but the gain of 295K jobs is still very impressive. The $ is making records also against the yen and the Aussie seems weak as well.
- Ongoing talks about Greece: A Eurogroup meeting on Monday was not totally unfruitful, but negotiations about reforms and a potential third bailout still continue and nobody knows how they end. Originally, the talks were described as “useless”.
- The beginning of QE: While this was pre-announced, including the exact date, the actual beginning of bond buying by the ECB and the national central banks (such as the German Bundesbank and the Banque du France) also weighs on the euro.
The critical support line is 1.0760. Why? This was an important line back in 2003, when the pair last traded at these levels. Below this line, it is hard to see any support until the very round number of 1.05.
Resistance now awaits at 1.0860 (weak) and 1.0910 (stronger).
More: EUR/USD: 1.05 Next Target En-Route To Parity; Downtrend Firmly In Place – ANZ
Here is how it looks on the chart. Low support is not too far anymore:
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