EUR/USD Forecast: Plunging PMIs and Pompeo's accusations outweigh Europe's opening up

• EUR/USD has been falling amid worsening US-Sino relations and weak eurozone data.
• Europe's hardest-hit countries are easing restrictions amid improving coronavirus statistics. 
• Monday's four-hour chart is relatively upbeat for the bulls.

When the "worst since the financial crisis" is good news – better than "lowest on record" – it provides little solace. Spain's Manufacturing Purchasing Managers' Index score 30.8 in April, worse than expected but above the lows of the 2008-2009 crisis, The eurozone's fourth-largest economy has taken baby steps to open up its economy and allow people to leave their houses more freely. Nevertheless, the economic pain is significant. 

A similar picture is seen in Italy, the third-largest economy which also lifts some of the limitations and has also been hit hard by COVID-19. The MAnufacturing PMI has come out at 31.1 points – far below the 50-point threshold that separates expansion from contraction.

Germany and France, the largest economies, are also moving forward with returning to normal as recent disease statistics are trending lower. The encouraging developments have raised the pressure to reopen the economies while fears of second waves persist. So far, investors are reacting to the damage already done and the euro is under pressure. 

On the other side of the Atlantic, President Donald Trump has reiterated his desire for states to return to activity sooner rather than later, but also made some market-depressing comments by threatening to cancel the trade deal with China. Trump accused Beijing of failing to fulfill its obligations in the accord, signed only in January. His words boosted the safe-haven dollar.

The president's statements were compounded by those from Secretary of State Mike Pompeo, who suggested that the virus originated from a lab in Wuhan. He said there is "enormous evidence" and that US intelligence services continue to investigate the topic. Chinese officials stick to the story that the disease emerged in a wet market in the now-famous city. 

These tensions between the world's largest economies could intensify when Washington publishes a comprehensive report on coronavirus, potentially in the next few days. 

The European Sentix Investor Confidence and US Factory Orders are of interest, yet the pace of reopening and Sino-American relations will likely set the tone for euro/dollar.

EUR/USD Technical Analysis

The world's most popular currency pair still enjoys upside, albeit waning, momentum on the four-hour chart and trades above the 50, 100, and 200 Simple Moving Averages. The Relative Strength Index is below 70, thus outside overbought conditions. All in all, bulls have the upper hand.

Resistance awaits at 1.0970, which was a swing high last week, followed by 1.0995, the April high, and finally by 1.1020, Friday's peak. 

Looking down, 1.0890 used to be fierce resistance and now serves as support. It is followed by 1.0860, a stepping stone on the way up, and then by 1.0810, twice a swing low in April.