EUR/USD: Concerns about covid to push the pair to new lows

EUR/USD has been trying to recover after the Delta-related dive. Nonetheless, the euro is set to dive after a dead-cat bounce, according to FXStreet’s Analyst Yohay Elam.

See – EUR/USD: Sellers stand ready to pounce again targeting levels close to 1.17 – SocGen

Current calm in markets merely a dead-cat bounce for EUR/USD

“Reflation rethink – markets are gripped by uncertainty about the global economic recovery and Delta fears outweigh inflation ones. In this environment, the safe-haven dollar is the main beneficiary. While the euro also serves as a second-rate funding currency – and holding up relatively well – it could resume its decline.” 

“Do lower inflation and a stalled vaccination campaign mean a weaker dollar? Not so fast. The greenback is the currency of choice in times of trouble, perhaps challenged by the yen, but leaving the euro far behind.” 

“Support awaits at the new July low of 1.1764, followed by 1.1740, 1.1717 and the all-important 1.17 line which was the low point in March.” 

“Resistance is at 1.1825, the daily high and where the 50 SMA hits the price. It is followed by 1.1850, 1.1885 and 1.19.”