EUR/USD Forecast: Breaking up or down? Bears in the lead as a jam-packed day unfolds

• Tension is mounting around EUR/USD ahead of a packed day.
• Coronavirus updates remain cautiously optimistic, but lockdowns will likely be extended. 
• Thursday's four-hour chart is pointing to an advantage for the bears.

The world's most popular currency pair is ready to explode, but to what direction? The agenda is packed ahead of Good Friday, and several factors are set to rock the pair.

Here are the factors to watch:

Eurogroup meeting

After failing to reach an agreement earlier this week, finance ministers from the eurozone countries meet again and will try to hammer out a joint response to the coronavirus crisis. Italy is leading the camp demanding to issue common debt – also dubbed coronabonds. Germany and the Netherlands oppose the move and offer using the bailout fund. 

Several compromise proposals are on the table, and the size of the aid – ranging from €500 billion to €1.5 trillion- has been thrown in the air.

The best outcome for the euro would be coronabonds, and the bigger the package, the better. Another inconclusive meeting would weigh on the common currency. Some kind of "euro-fudge" is on the cards. 

See Coronabonds: Turning a health crisis with a political one? EUR/USD parity in sight again

Coronavirus updates

Italy and Spain continue flattening the curve – slower percentage gains in new cases and deaths. However, both countries have seen the number of mortalities edging higher. France continued reporting high levels of hospital deaths from COVID-19 but did not publish losses of life from elderly homes and other external facilities. Germany's latest figures have also shown a slowdown but no dramatic fall.

Coronavirus statistics are critical as countries are considering extending the lockdowns, with Italy contemplating keeping restrictions through late April. French President Emmanuel Macron is scheduled to address the nation on Monday, but reports about the proposed measures may come out beforehand. 

Shorter shutdown extensions may support the euro, while longer ones may undermine it. 

More: Coronavirus Exit Strategy: Three critical factors to watch and how they impact currencies

ECB Meeting Minutes

Cristine Lagarde, President of the European Central Bank, has said that every month of shutdown lowers Gross Domestic Product by 2-3%. She also weighed in on the Eurogroup debate, urging countries to act and not insisting on the exact mechanisms. 

The ECB pledged over €1 trillion in Quantitative Easing and also relaxed conditions in its bond-buying scheme. The meeting minutes from the bank's decisions may reveal additional steps that the Frankfurt-based institution is willing to take. 

Additional steps have room to underpin the euro as they would allow governments to do more. 

More: Is money printing positive for currencies? Lessons from Lagarde's largesse, Bailey's bailout

US jobless claims and consumer confidence

The second half of March was terrible for the US labor markets, with jobless claims rising by around 10 million. Economists expect weekly unemployment applications to ease to 5.250 million for the week ending on April 3 from 6.648 million beforehand. A worse outcome may weigh on the mood and boost the dollar.

See: Jobless Claims Preview: Is there an unemployment encore?

Later, the preliminary Consumer Sentiment Index from the University of Michigan for April is projected to drop to 75 from 89.1 in the final read for March. The updated survey will have incorporated consumers' mood after shelter-in-place orders have been put in place. 

See: Consumer Sentiment Preview: Setting a dismal standard

Powell's speech

Jerome Powell, Chairman of the Federal Reserve, delivers a speech at the Brookings Institue, and the topic is the economy. Minutes from the Fed's emergency March 15 videoconference – which resulted in slashing rates to 0% – have shown that the bank already had additional steps in mind. The world's most powerful central bank unleashed unlimited Quantitative Easing later on. 

Powell's views on the economy and suggestion of further steps may rock markets. An upbeat outlook may weigh on the dollar while expressing concerns could boost the world's reserve currency. 

More: FOMC minutes: All participants viewed near-term economic outlook as having deteriorated sharply

Overall, the pre-Easter trading day is promising and could result in substantial moves.

EUR/USD Technical Analysis

Momentum on the four-hour chart has turned positive, but EUR/USD trades below the 50, 100, and 200 Simple Moving Averages. Bears have a minor lead over bulls.

Support awaits at 1.0830, which provided support earlier this week, and it is followed by 1.0770, the weekly low. Further down, the 2020 trough of 1.0640 awaits the currency pair.

EUR/USD faces resistance at 1.0880, the daily high, followed by 1.0930, the weekly high. Further above, 1.0970, 1.1050, and 1.1090 await.