The eur usd continues its movement to the downside as coronavirus second wave fears show up again. With the United States temptations to reopen the economy ,through easing lockdown measures, have failed, and more states are closing again.
California Governor Gavin Newsom have ordered residents to wear masks in public spaces and bars to close as coronavirus cases and hospitalisations surge again in Los Angeles.
The fear sentiment, is expressed through different market assets and financial risk instruments.
A rise in the U.S Dollar index DXY from its June 10th bottom of 95.80 to 97.63 right now, making a surge of 1.90% since then.
The U.S 10 year bond yields is also back to the downside since early June.
This situation pushes investors to go back to safe heavens buying cash and government bonds.
To sum-up, the surge in the Dollar is still likely to push the eur usd to the downside, and may retest the short term support of 1.1170.
Any break below 1.1170, confirmed by a daily close below and high momentum opens the door for a more decline to levels around the area of 1.1100 and 1.1050.
fundamentally this vision is backed by the fear sentiment in the market. and is likely to continue till some good news appear again weighing positively on business, consumer, and investing sentiment.