EURUSD: drop to 1.1170 expected

On Thursday the 18th of June, trading on the euro closed down once again. The single currency shed 0.33% against the US dollar to reach 1.1206.

The dollar rose against the majors on the back of declines on the euro and pound, as well as increased demand for safe haven assets amid renewed fears over the rising number of new coronavirus infections. Investors are once again nervous about the impact the COVID-19 pandemic is going to have on the global economy.

The British pound dropped to 1.2403 against the dollar following the Bank of England’s meeting, where there was no discussion of negative interest rates or the regulator’s bond-buying program. The euro followed the pound downwards.

Day’s news (GMT+3):

  • 10:00 UK: retail sales (May), public sector net borrowing (May).
  • 11:00 Eurozone: trade balance (Apr).
  • 15:30 US: trade balance (Q1).
  • 20:00 US: Baker Hughes US oil rig count, Fed Chair Jerome Powell’s speech.

Current situation:

The pair dropped to 1.1200 just as expected. From the 45th degree and balance line, the pair slid further to 1.1186. The euro has now dropped by 76 pips, while the pound has shed 149 pips.

At the time of writing, the euro is trading at 1.1208. The pair has been in a correction for the last 13 hours. Markets are braced for fresh lows and a drop to 1.1170. Since we’ve got three lows on the hourly timeframe (1.1228, 1.1208, and 1.1186), the bulls may try to induce a bounce from 1.1186 in order to form a double bottom model. If we look at the daily timeframe, there’s nothing preventing the pair from reaching 1.1150. Due to the fact that it’s Friday, we’ve set the target slightly higher.

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