Euro Latest: EUR/USD Could Break Lower, Powell Speech in Focus
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EUR price, news and analysis:
- EUR/USD is in danger of breaking below trendline support on the daily chart.
- A prompt could be a speech due at 1300 GMT on current economic conditions by US Federal Reserve Chair Jay Powell.
- Fears of a second wave of coronavirus infections, US-China trade tensions and a debate on whether US interest rates should be cut below zero are all weighing on market sentiment and could potentially benefit the safe-haven US Dollar.
EUR/USD in danger of breaking lower
A host of market worries could potentially benefit the safe-haven US Dollar near-term, leaving EUR/USD at risk of breaking below trendline support that has been in place for almost two months. Since then, the pair has traded around the 1.09 mark but a break below 1.08 would likely lead to further losses.
EUR/USD Price Chart, Daily Timeframe (January 14 – May 13, 2020)
Chart by IG (You can click on it for a larger image)
Federal Reserve Chair Jay Powell is due to talk at 1300 GMT on current economic conditions and his speech could prove a catalyst for the drop in EUR/USD following US President Donald Trump’s call for negative US interest rates. Powell seems likely to push back on that idea but negative rates remain a possibility, with market pricing suggesting they could come as early as the start of next year.
In addition, the safe-haven USD will likely benefit from an escalation of US-China trade tensions and growing fears of a second wave of coronavirus infections. The White House’s top US infectious disease expert, Dr. Anthony Fauci, warned Congress Tuesday that some states are prematurely reopening businesses, risking additional outbreaks of coronavirus, particularly among the most vulnerable populations.
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--- Written by Martin Essex, Analyst and Editor
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.