The EUR/USD has been in a steady decline since the start of 2020, falling over 3.5% on the perception the U.S. economy is on a much stronger footing than its euro zone counterpart. The pair's drop has started to accelerate since the outbreak of the coronavirus, which is seen as potentially doing more harm to the EZ economy and forcing the ECB to ease policy further nL1N2AD1HH.
The EUR/USD has broken and closed below key technical support, including the 2019 low at 1.0879 and the 76.4 Fibonacci at 1.0863.
There are now no technical support levels of note until the Jan 3, 2017 low at 1.0340, but oversold readings on the daily charts will likely spur bouts of short-covering well ahead of that level. A catalyst for further acceleration of the EUR/USD decline may come later today when the EZ and Germany release Q4 GDP data, followed by the release of U.S. retail sales, IP and consumer sentiment.
If the data highlights the gap between the two economies, it will likely force the last remaining longs to capitulate.
If the numbers are less flattering towards the U.S. it might spark a correction that would present a EUR/USD selling opportunity.
Only a break back above the 10-day moving average at 1.0941 would warn of a short-term bottom in place.