The Euro remains trapped in a fierce battle against an unyielding Dollar with prices trading marginally below 1.1250 as of writing.

Over the past few days, the EURUSD has displayed explosive levels of volatility thanks to conflicting market themes and sharp swings in investor sentiment. With the Dollar finding renewed support from new coronavirus outbreaks in Beijing and rising geopolitical tensions, the Euro is poised to extend losses against the Greenback.

On the hourly timeframe, the head and shoulders technical pattern is bearish and suggests a move towards 1.1220 and 1.1180, respectively. Technical traders may wait for a solid hourly close below the 1.1220 intraday support level before riding the decline lower.

Zooming out to the H4 chart, bears seem to be in control with prices cutting below 1.1250. Technical lagging indicators like the 20 Simple Moving Average and MACD point to the downside. Sustained weakness under 1.1250 on the H4 chart could trigger a decline back towards 1.1200 which remains a significant support level.

Looking at things in the longer term, the Euro remains in a losing battle against the Dollar on the daily charts. Should the last line of defence at 1.1200 give way, expect prices to tumble towards 1.1150 and 1.1090, respectively.

Commodity spotlight – Gold

One would have expected Gold shine amid the market caution and rising geopolitical tensions.

However, the opposite was witnessed on Wednesday as prices shed 0.6% despite the rising levels of risk aversion. If the mighty Dollar continues to steal Gold’s safe-haven flows, the precious metal may sink lower in the short term.

In regards to the technical picture, the precious metal is under pressure on the daily charts. A breakdown below $1715 may open a path back towards $1700 and $1670. Should $1715 prove to be reliable support, prices may rebound towards $1747.

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