The EURUSD pair plunged by more than 0.40% in the Asian session after Donald Trump announced that he and the First Lady had tested positive for the Covid-19. In all, the US dollar index has jumped by more than 0.30% while the Dow Jones has fallen by more than 300 points.
A few hours ago, close Trump aide, Hope Hicks revealed that he had tested positive for Covid-19. As a result, Donald Trump and his wife, Melania, announced that they were starting their quarantine as they waited for the test results. Unfortunately, they came out positive, meaning that the president will be isolated a few weeks before election.
The EURUSD is also reacting to news that the European Central Bank (EC) is contemplating following the footsteps of the Federal Reserve. In a statement yesterday, Christine Lagarde said that the bank was starting a review of the inflation target. If it implements the plan, it means that the bank will leave rates unchanged for several more years.
The EUR/USD is also looking ahead of the nonfarm payroll data that will come out at 12:30 (GMT). Analysts polled by Reuters expect the data to show that the unemployment rate dropped to 8.2% in September as the number of nonfarm payrolls increased to more than 840k.
EURUSD technical outlook
The EURUSD pair is trading at 1.1709, which is a few pips below the low of 1.1696. On the four-hour chart, the price is a few pips above the 23.6% Fibonacci retracement level. Also, it is slightly below the four-hour exponential moving average.
Therefore, I suspect that the pair will continue falling as bears target the next support level at 1.1650. On the flip side, a move above yesterday’s high of 1.1770 will invalidate this trend.
EUR/USD technical chart
