EUR/USD has fallen below 1.22 in the earlier sessions as fears of the rapidly transmitting coronavirus strain take hold of markets. US lawmakers reached a $900 billion stimulus deal and improving the market mood.
Fresh virus fears knocked down risk sentiment and sent Euro sharply lower on Monday.
A pullback from new 2-year high of 1.2270 and so far retraced nearly 61.8% of 9-18 December bullish move. EUR/USD is supported by an ascending trend-line since early November which coincides with the retracement levels where price failed to break lower.
The EUR/USD pair is currently trading in the 1.2200 price zone, recovering part of the lost ground on panic selling. 1.2170 is a critical barrier to look into a break of the barrier and trend-line support would generate initial reversal signal and open way for deeper correction to 1.2070, with next key points at 1.2000 expected to come in focus.
The short-term picture suggests that the pair is not yet out of the bullish strength. In the meantime, technical indicators have lost their bearish momentum . 2020 yearly high at 1.2270 provides immediate resistance, with potential gains limited as long as the price remains below it.
