EUR/USD to extend the downside towards 1.17

EUR/USD adds to the ongoing leg lower and already trades in new multi-day lows in the 1.1730/25 band, always against the backdrop of the broad-based cautious mood and investors’ preference for the greenback. FXStreet’s Pablo Piovano notes that the door is open for extra downside.

See – EUR/USD: More downside impetus on a break below 1.17 – OCBC

Key quotes

“The unremitting advance of the coronavirus pandemic vs. the now slower pace of the economic recovery and stalled progress of candidate vaccines against the COVID-19 keep sponsoring the inflows into the safe havens and therefore undermine a sustained rebound in the single currency (and the rest of its riskier peers).”

“Moving forward, a slew of ECB speakers – including President Lagarde – should keep the attention on the euro throughout the session ahead of the EU Summit on October 15-16.”

“The continuation of the corrective downside in EUR/USD carries the potential to extend further and re-visit the 1.1700 neighbourhood, where coincide the immediate support line (off 2020 high) and a Fibo level (of the 2017-2018 rally).” 

“The surpass of recent tops in the 1.1830 zone should open the door to extra gains to, initially, the 1.1917 level (September 10) ahead of 1.1965 (August 18). A move to the 2020 high just beyond 1.2000 the figure is seen unlikely for the time being at least.”