EUR/USD Technical Analysis: Corona Fears Increase Losses

Mahmoud Abdallah

The bullish rebound gains for the EUR/USD currency pair last week that culminated in testing the resistance level 132.70, are subject to setbacks at the beginning of this week's trading.

This is because it fell to the support level 131.77 before settling around the 131.90 level in the beginning of today's trading.

Investors returned to the safe havens in light of fears of the rapid spread of the Corona Delta variable, which threatens global efforts to contain the epidemic, and thus the future of global economic recovery. Recently, Italian health and regional officials are urging people to leave for vacation only after they have been vaccinated, as the delta variant of COVID-19 has become more prevalent in the country.

Virologists in Italy are issuing warnings that the virus carrying this variant is more transmissible and less sensitive to COVID-19 antibodies. Italians in some places are increasingly not attending for the second dose of the vaccine, or even keeping the appointments for the first, as the holiday season approaches. So far, about 30% of people in Italy have completed the coronavirus vaccination.

In the country of 60 million, doctors are particularly concerned about the 2.7 million people older than 60 who haven't registered for their first dose.

Officials said that the Romanian capital did not record any new cases of coronavirus on Sunday. Just a few months ago, intensive care units in Bucharest were expanded to capacity as the cumulative infection rate for 14 days exceeded 7 per 1,000 inhabitants. Now the capital's infection rate - the same as the country as a whole - is just 0.05 per 1,000 inhabitants. Romania's vaccination campaign saw nearly 9 million vaccine doses administered in the country out of more than 19 million, but there are now concerns as daily vaccine doses have slowed dramatically and only 23% of the country's entire population is vaccinated against COVID-19.

Since the outbreak of the pandemic, 1.08 million people in Romania have tested positive for COVID-19 and more than 33,000 people have died.

On the other hand, Tokyo recorded 386 new cases of infection on Sunday, up from 376 in the previous week, as the capital increased on a weekly basis for the eighth consecutive day. Japan had 794,457 cases and 14,657 deaths as of Saturday.

According to the technical analysis of the pair: On the daily chart, the price of the EUR/USD currency pair is still trying to return to the vicinity of its ascending channel. This may happen if it breaks the resistance level 133.20 again. The bears are determined to penetrate the psychological support 130.00 again to confirm their control over the performance. It must be considered that the attempt was close, as during the past week the pair fell to the level of 130.03. The pair will be affected today by the extent to which investors take risks or not, as well as the reaction from the announcement of German inflation figures and new statements from ECB Governor Lagarde.

EURUSD

Mahmoud Abdallah
Mahmoud has been working fulltime in the Foreign Exchange markets for 12 years. Offers his analysis, articles and recommendations at the most renewed Arabic websites specialized in the global financial markets, and his experience gained a lot of interest among Arab traders. Works on providing technical analysis, market news, free signals and more with follow up for at least 12 hours a day, and aims to simplify forex trading and the concept of trading for his audience.

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