Above is the daily chart of the euro starting from the EUR/USD highs in the spring of 2018. The pair’s two years of weak downward movement.
The euro has been falling fast since February 3. We can’t say exactly what caused the Euro’s fall in February. If we take into account that the other major currencies do not fall so significantly against the dollar, we can assume that there are problems with the Euro.
Options: revision of large portfolios after Britain left the EU. Britain was one of the EU donors, now the burden is on Germany. France will grow which is bad for the euro. Perhaps there is a crossover from the euro to pounds.
A possible option is a significant tie of the German economy to China in supplying machinery and equipment to China, where the supply of parts are from China.
The situation in terms of TA:
There is a strong signal of a downward trend: a break down 1.0880 and consolidation below.
According to the schedule, the descending border of the channel is clearly visible, which is conducted very conservatively.
The fall of the euro will continue until the end of February with the target at 1.0600.
We hold sales from 1.0990 and we wait for a corrective rebound up to 1.0940.
The material has been provided by InstaForex Company – www.instaforex.com