- EUR / USD has been on the defensive for the entirety of Thursday’s session and has fallen back to the low of 1.1900.
- Rising yields on US government debt have been the main factor driving the decline.
- But news of the tightening of Covid-19 restrictions in France is weighing on the euro.
The pair EUR/USD, which has been under selling pressure since the start of Thursday’s session after failing to break last week’s highs of 1.1990, has now completely reversed its post-FOMC gains made on Wednesday, with the pair now trading at the minimum of 1.1900. That means, on the day, the EUR / USD lost more than half a percent or roughly 70 pips.
EUR / USD bears will be targeting a retest of the weekly lows at 1.1880 and perhaps even a move towards the monthly lows around 1.1840, which is where the 200-day moving average resides.
Performance of the day
The main driver of the EUR / USD slide on Thursday has been a strengthening in US government bond yields that pushed up the US / EU rate differentials, something that is bearish for him. EUR / USD. However, while the euro is far from being the worst performing currency in the G10 (the NZD and the CAD are, for example, more than 1.0% lower than the USD), the euro is also struggling against the GBP and the USD. JPY.
It’s probably because the news on the Covid-19 front was bad on Thursday; Amid a persistently high Covid-19 infection rate that now appears to be driven by more infectious variants (such as the variant that ravaged the UK during the December / January period), France has just announced new lockdown restrictions for 16 regions, including Paris. The new measures involve closing all non-essential stores and restricting the movement of people to fewer than 10,000 from home and will last for 4 weeks. The French government has said that the new measures will reduce 0.2% of the country’s GDP growth in 2021, and the regions will enter a tighter lockdown and account for 40% of the country’s GDP.
Technical levels
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