European stocks are being hit quite badly to start the day, with the DAX down by over 2% and that draws focus to its 30 July low and 200-day moving average.
US futures are also down by ~1.0% while Treasury yields are weighed lower and oil prices are also slumping amid the risk-off sentiment in the market.
In turn, this is all keeping the dollar more bid as we see EUR/USD trade close to session lows around 1.1820 as sellers seize back some near-term control in the pair:
The price action suggests that the near-term bias switches to being more neutral now on a drop below its 100-hour MA (red line). Sellers will be aiming towards 1.1800 once again and a breach of that level will call into question the 200-hour MA (blue line) @ 1.1786.
I'd argue that a firm breach of the figure level is still the key step that sellers need to take in order to chase further downside momentum in the sessions ahead.
Elsewhere, the greenback is also posting modest gains against the aussie:
AUD/USD hit a low of 0.7103 earlier but buyers managed to keep a defense of the 0.7100 level with the confluence of the key hourly moving averages helping @ 0.7101-02.
That is the key near-term spot to watch for the pair should the downside momentum extend later in the trading day should the current risk mood persist.
Looking at how things are playing out, it is tough to see the market mood switching today amid the focus on the virus situation and the fact that the barrage of virus headlines to come are likely going to be more negative than positive.
As such, keep the focus on the near-term levels above to identify how strong the bias will be. At the same time though, it is the week before the US election and it could prove tough to stick with any trades with strong conviction in the next few days.
For now, the pandemic jitters are back and it is likely to stay for a while, thus bringing the focus back on the battle between easy money and virus/economic fears.