EUR/USD struggles to extend Tuesday's gain as coronavirus worries return

• Dollar takes a lead on haven demand as coronavirus fears return.
• New York reported the biggest single-day rise in the number of cases. 
• EUR/USD has trimmed gains seen on Tuesday and could suffer a deeper drop.

EUR/USD is flashing red while heading into the London open, marking a weak follow-through to Tuesday's 0.92% rise from 1.08 to 1.0926.

The pair is trading at 1.0860 at press time, representing a 0.28% decline on the day.

The American dollar found bids in Asia, as the S&P 500 futures declined by 0.5%, signaling risk aversion after New York reported 731 fatalities from coronavirus on Monday- the biggest daily spike. Meanwhile, Spain's daily toll of coronavirus deaths also rose for the first time in five days.

The risk sentiment also weakened after ratings agency Standard and Poor's put the country's AAA rating on the negative, citing recent deterioration in the fiscal metrics.

The downside in EUR/USD will likely gather pace if the European equities open on a negative note in response to the renewed virus concerns. Traders, however, should note that oil benchmarks are flashing green and could bode well for stocks, in which case, the haven demand for the dollar will likely weaken.

The European data docket is thin, while across the pond, Federal Reserve's March meeting minutes are scheduled for release at 18:00 GMT.

From a technical perspective, the immediate bias would remain bearish as long as the hourly chart descending trendline drawn from overnight highs is intact. As of writing, the trendline hurdle is located at 1.0888. A break above that level would signal a continuation of the rally from the April 6 low of 1.0768 and open the doors to the 200-hour average hurdle at 1.0932.

Technical levels