Société Générale economists report that EUR/USD has staged a steady bounce after defending 100-DMA at 1.0520 but the move faltered near 1.0910. The pair must hold above this Moving Average to avoid a deeper pullback.
EUR/USD Bounces but faces resistance
EUR/USD has been on a rollercoaster ride in recent months, as the pair continues to be impacted by a range of economic and geopolitical factors. According to economists at Société Générale, the pair has recently staged a steady bounce after defending the 100-day moving average (DMA) at 1.0520, now at 1.0610. However, the move faltered near 1.0910, and the pair must hold above this moving average to avoid a deeper pullback.
The impact of economic and geopolitical factors on EUR/USD
EUR/USD has been impacted by a range of economic and geopolitical factors in recent months. The ongoing Covid-19 pandemic and the associated economic fallout have had a significant impact on the pair, as have global trade tensions and the uncertainty surrounding Brexit. In addition, the US Federal Reserve’s monetary policy decisions have also had a significant impact on the pair, as has the ongoing strength of the US dollar.
Defending the 100-DMA
The 100-DMA is a key technical indicator that is closely watched by traders and analysts alike. According to Société Générale economists, EUR/USD recently defended this moving average, which is now at 1.0610, and staged a steady bounce as a result. However, the move faltered near 1.0910, and the pair must hold above this moving average to avoid a deeper pullback.
The potential impact of a deeper pullback
If EUR/USD does experience a deeper pullback, this could have significant implications for traders and investors. A deeper pullback could lead to increased volatility in the markets, and could also impact other currency pairs and financial assets. In addition, a deeper pullback could also lead to increased uncertainty and risk aversion, which could in turn impact economic growth and investment.
The outlook for EUR/USD
The outlook for EUR/USD is uncertain, as the pair continues to be impacted by a range of economic and geopolitical factors. While the recent bounce is a positive sign, the pair must hold above the 100-DMA to avoid a deeper pullback. Traders and investors will be closely watching economic data releases, as well as central bank policy decisions, for clues about the future direction of the pair. In addition, geopolitical developments, such as the ongoing Covid-19 pandemic and global trade tensions, will also continue to impact the pair in the months ahead.
In conclusion, Société Générale economists report that EUR/USD has recently staged a steady bounce after defending the 100-DMA at 1.0520, now at 1.0610. However, the move faltered near 1.0910, and the pair must hold above this moving average to avoid a deeper pullback. The outlook for EUR/USD is uncertain, and traders and investors will be closely watching economic data releases, central bank policy decisions, and geopolitical developments for clues about the future direction of the pair.
