- The recent global risk on/ risk off theme since the eruption of the coronavirus has shifted to a more risk on bias recently, which seen global equities hitting multi-year and record highs, whilst broadly in the FX space, the US Dollar has stayed the strong currency, particularly within G3 (against the Euro and Japanese Yen).
- This has seen EURUSD pushing lower throughout February, in both risk on/ risk off scenarios and leaves threats lower.
- EURUSD is sitting just above a multi-year low at 1.0878, the lowest level since May 2017, which leaves threat for a possible acceleration through this key support floor.
EURUSD day trade outlook: Still bearish, risk through key support
A Tuesday push still lower through 1.0903 support, then a small rebound from just above the multi-year low at 1.0878, to reinforce Monday’s plunge through key 1.0939, PLUS the early February plunge through the key 1.0980 level, and whilst below 1.0938 keeping the threat lower for Wednesday.
- We see a downside bias through 1.0901; a break below aims for critical 1.0890/78, maybe 1.0839.
- But above 1.0938 targets 1.0958; above opens risk up towards 1.0985.
EURUSD intermediate-term outlook
A January selloff surge through the key 1.1065 level signalled an intermediate-term bearish shift.
Downside risks: We see a downside risk for 1.0878.
What changes this? Above 1.1096 shifts the intermediate-term outlook to an intermediate-term bull theme.
4 Hour EURUSD Chart