EUR/USD bounces of weekly lows near 1.0730
|- EUR/USD met decent support in the 1.0730/25 band.
- German IFO survey surprised to the upside in April.
- Eurogroup will meet again in early May after Thursday’s fiasco.
The single currency remains on the defensive for yet another session at the end of the week, forcing EUR/USD to recede further and clinch weekly lows in the vicinity of 1.0720.
EUR/USD offered on dollar buying, poor data
EUR/USD has been posting losses since Monday without being interrupted, coming under extra selling pressure amidst increased dollar buying, safe haven demand and disappointing figures in the domestic calendar.
In fact, another drop of suffering fell on the euro on Friday after the German IFO survey came in short of expectations in all of its components for the month of April, adding to Thursday’s negative surprise from PMIs in core Euroland.
Data wise across the pond, Durable Goods Orders for the month of March is coming up next seconded by the final gauge of the Consumer Sentiment for the current month tracked by the U-Mich index.
Adding to the sour atmosphere surrounding the single currency, another fiasco at the Eurogroup meeting showed consensus among EU leaders that further action is much needed to counter the devastating (albeit asymmetrical) impact of the coronavirus in the region, although, once again, no decision has been made on the subject. The leaders will meet again on May 6th.
What to look for around EUR
The euro remains on a bearish note so far this week, always looking to developments from the coronavirus and its impact on the economy and dollar dynamics as the main drivers of both sentiment and price action. On the more macro view, the single currency is expected to remain under scrutiny in the next periods in light of the forecasted contraction in the economy of the region in the first half of the year, relegating hopes of a strong recovery to Q3 and/or Q4.
EUR/USD levels to watch
At the moment, the pair is losing 0.12% at 1.0763 and faces immediate contention at 1.0727 (weekly low Apr.24) followed by 1.0635 (2020 low Mar.23) and finally 1.0569 (monthly low Apr.10 2017). On the upside, a breakout of 1.0814 (78.6% Fibo of the 2017-2018 rally) would target 1.0990 (weekly/monthly high Apr.15) en route to 1.1041 (200-day SMA).
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