EUR/USD still vulnerable to further downside for now

Technical Analysis

Author: Justin Low | eurusd

It still isn't the time to catch the falling knife that is the euro

EUR/USD W1 19-02
The pair is holding just above 1.0800 for now, still trading in a tight 16 pips range today as we see price action move towards the key trendline support at 1.0803 on the week.

If you really want to be picky, there is further support from another trendline that can be drawn and that is seen closer towards 1.0732. But sentiment in the pair is rather clear despite the technical levels, it's just "don't catch the falling knife".

Looking ahead this week, the key focal point for the euro will be the European PMI releases for February on Friday. If the coronavirus impact is more profound than anticipated, that could very well trigger further weakness in the single currency.

In that lieu, some risk aversion may also creep into markets and that will also benefit the dollar and that could prove to be a double-whammy for EUR/USD to the downside.

As such, unless we clear that hurdle, EUR/USD remains vulnerable to a further downside push for now and that won't change until the technical picture turns around as well.

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