EUR/USD Forecast: Bears await a sustained break through 1.0800 mark, Eurozone PMIs eyed

The EUR/USD pair failed to capitalize on its early uptick on Wednesday, instead met with some fresh supply and dropped to its lowest level in two weeks amid a late pickup in the US dollar demand. A goodish recovery in the global risk sentiment prompted some initial USD weakness and provided a modest lift to the major, albeit the attempted positive move once again ran out of the steam ahead of the 1.0900 round-figure mark. Despite the better market sentiment, investors remain concerned over the economic fallout from the coronavirus pandemic. This continued lending some support to the USD's status as the global reserve currency and eventually capped the upside for the major.

This comes amid division among the EU members over the issuance of Coronabonds and the mechanism to support the economy, which exerted some additional downward pressure on the shared currency and contributed to the pair's downfall. Hence, the key focus will be on Thursday's Euro group meeting and any potential announcements of extra stimulus in the euro area to tackle the coronavirus crisis. Apart from this, the flash version of the Eurozone PMI prints for April will also play a key role in influencing the sentiment surrounding the common currency. Later during the early North-American session, the US economic docket – highlighting the release of initial weekly jobless claims and flash manufacturing PMI – might further contribute towards producing some meaningful trading opportunities.

Short-term technical outlook

From a technical perspective, the pair once again showed some resilience near the 1.0800 mark and thus, warrant some caution before positioning for any further depreciating move. A convincing break through the mentioned level might now be seen as a fresh trigger for bearish traders and set the stage for a slide below the 1.0770-65 intermediate support, towards testing the 1.0700 round-figure mark. The downward trajectory could further get extended back towards challenging multi-year lows support near the 1.0635 region.

On the flip side, immediate resistance is pegged near the 1.0855-60 region and is followed by the 1.0890-1.0900 supply zone. Sustained strength above the mentioned barriers should assist the pair to head back towards 50-day SMA, around the 1.0955-60 region. Bulls might then aim for a move beyond the key 1.10 psychological mark, possibly towards the next major hurdle near the 1.1040-45 region.