There's not much left stopping EUR/USD from a further drop after break of 1.0900

Technical Analysis

Author: Justin Low | eurusd

EUR/USD stays vulnerable as sellers now chase a move under 1.0900

EUR/USD W1 13-02
ForexLive
Price is trading at lows last seen since May 2017 and there is only the 76.4 retracement level @ 1.0864 as well as the key trendline support from November 2017 @ 1.0808 that really has the potential to stop any potential run lower in the pair.

It is pretty much a slippery slope from here as the technical picture certainly doesn't look pretty for the euro at this stage.

The real worry is that we may see the fundamentals align even more than it already has with the technical story, with coronavirus fears returning - helping to underpin the dollar but also putting added pressure on the euro area growth outlook.

For now, lawmakers and policymakers are brushing aside the possible impact as they claim that it will only drag growth estimates weaker by 0.1% to 0.2% this year.

However, I would argue that it is still too early to tell and the longer the disruption continues in China, the more it would also weigh on the global economy and Europe.

The risk-off tilt today still remains rather contained but just be mindful that the worst may not yet be over and that also applies for the case of EUR/USD to the downside.

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