EUR/USD falls to a low of 1.1745, weakest level since 19 October
The euro is continuing its struggle since late overnight trading, after a drop below 1.1800 and its 200-hour MA (blue line). As such, sellers have seized near-term control.
Germany and France set to announce tighter virus restrictions later today was the lead culprit in dragging down the single currency, with the dollar firming on the softer risk mood so far on the session only exacerbating the drop in EUR/USD today.
There was some minor support in the pair around 1.1762-64 but sellers are looking poised to hold a break below that now, with little else in the way before 1.1700.
As much as the virus resurgence is a key focus in trading this week, the US election and month-end flows are also factors to consider over the next few sessions.
Back to EUR/USD, optimism is fleeting in the euro as the region’s two biggest economies are set to announce a revamped lockdown for the next few weeks.
Unless virus cases start improving, the market will grow more fearful that this stop-start motion in the economy could persist well into next year.
Euro area economic data going into Q4 is also likely to be more subdued as such, so the only bright spot for the single currency may be more help by the ECB.
The central bank will be meeting this Thursday but is unlikely to take action just yet, though the latest developments today could warrant some consideration at least.