Daily Market Recap - EURUSD In Freefall After New Lockdown Measures

The Euro plunged against the US Dollar on Thursday as markets begin to digest the news of another national lockdown in France and Germany. The EURUSD is trading around the 1.165 marks at the time of writing, down 0.80 percent for the day.

Measures taken to combat the rapid spread of covid-19 in Europe have led nations to re-confine themselves in an effort to alleviate pressure on hospitals, as new infections cases have already maxed out the capacity in reanimation centers in France.

European Central Bank (ECB) Chief Christine Lagarde made an announcement today which did little to stem the fall in the EURUSD. She said that rising covid-19 cases and efforts by governments to contain the pandemic have led to a ‘clear deterioration’ of the Eurozone‘s economic outlook, with risks ’clearly tilted to the downside.

The ECB is widely expected to continue monetary easing policies to alleviate the impacts caused by the ongoing pandemic on the economy. This will likely contribute further downward pressure on the Euro in the medium to long run.

Meanwhile, in the US, quarterly GDP figures released today have set a new record as the US grew at its fastest pace ever in Q3. The GDP growth rate came in at 33.1 percent annualized, in contrast with the -31.4 percent witnessed in the previous quarter.

From a technical perspective, the main trend in the EURUSD has shifted in favor of the bears today with the pair dipping significantly below the upward trending parallel channel from September. The immediate support level would be the psychological round figure of 1.65, with the 1.16 stronger support in extension. A break below this point would open the door to freefall towards the 1.14 handle.

(Chart Source: Tradingview 29.10.2020)

On the flip side, the next resistance point should fall around the 1.17 mark, with 1.1727 the next point to watch above that. For now, the EURUSD will likely try to stabilize around the 1.65 marks after such a steep fall. Value pickers may be waiting for another test of the 1.60 level before buying resumes in the pair.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.