EUR/USD has awakened. The world’s most popular currency pair did not turn into the pound or to a significant mover, but it has extended the decline since breaching the 1.1120 double-bottom support line.
Touching on the round level of 1.10, the pair seems reluctant to fall over. Will it make the break? A lot depends on the pound.
The recent move is related to the strength of the US dollar (seen also in the meeting minutes) but also to the fall in the British pound. Since the pound flash crashed, the euro has also been under immense pressure. The reason for the fall in the British currency is “Hard Brexit”, a scenario in which the UK abruptly exits the European Union. Well, there are always two sides to a divorce: the EU is being left by the UK, and the EU has problems of its own.
Also the euro-zone seems unable to mitigate its own crises, with yet another can-kicking exercise with Greece providing an exmple.
Further below, we find the recent summer low of 1.0960 as the next level of support. It is followed by the post-Brexit swing trough of 1.0910. Looking even lower, we have two significant levels: 1.0820 and 1.0710.
More: EUR/USD: Watching The Daily Triangle For Breakout Signals – JP Morgan
Here is the chart:
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