EUR/USD fails to confirm above 1.0800; focus on 1.0785 support area
|
- EUR/USD recovery attempt finds resistance right above 1.0800.
- Risk aversion and doubts about the ECB bond-buying program hurt the euro.
- Below 1.0785, the pair might aim towards late March lows at 1.0725.
The EUR/USD recovery attempt witnessed during the early European session has lost traction right above 1.0800 and the pair is pulling back again, aiming towards 1.0785 support area.
Risk aversion and doubts about the ECB bond-buying hurt the euro
The euro is losing ground amid a risk-averse market sentiment, as the spread between the Italian and German bonds surges to 250 basis points for the first time in two weeks. The market has reacted with concern to the German constitutional court’s ruling, calling for the ECB to justify its bonds purchasing program This decision might undermine the Bank’s plans to shore up eurozone economy after the coronavirus-induced shock.
Furthermore, macroeconomic indicators have failed to improve sentiment. The US ADP employment report has forecasted a record 20.2 million decline on private employment in April. In such a negative scenario, investors are betting on safe assets like the US dollar or the Japanese yen, in detriment of riskier currencies like the euro.
EUR/USD support level at 1.0785 under threat
The euro is right now pulling back from intra-day highs at 1.0825, aiming towards 1.0785 (intra-day low). If this level gives way, the next potential support areas might be 1.0725 (April 24 low) and 1.0635 (March 22 low). On the upside, the pair should break above the mentioned top at 1.0825 to aim for 1.0890/95 (April 17, 20, 22 and 28 highs) and then towards the 50-day SMA around 1.0960.
EURUSD key levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.