- EUR/USD has been rising amid hope for turning a corner in the old continent's battle with coronavirus.
- Additional disease headlines, fiscal stimulus, and coronabonds are eyed.
- Tuesday's technical chart is showing an improvement picture for the bulls.
"Too soon to say whether coronavirus cases are easing" – the words of Germany's Robert Koch Institute, which is leading efforts to curb COVID-19. The same message has been echoed other countries, but investors are already looking towards what comes next, as Europe's largest countries report a slowdown in the pace of new infections and deaths. Spain has reported the fourth consecutive drop in daily mortalities, and Italy confirmed a substantial fall in new cases.
Stock markets are on the rise around the world and the safe-haven US dollar is on the back foot. Markets are also encouraged by signs of a slowdown in new cases in New York and by talk of another US fiscal stimulus package. House Speaker Nancy Pelosi is mulling another $1 trillion in spending that may include sending additional cheques to all Americans. President Donald Trump seems to support such a scheme.
The common currency's advance is somewhat limited by ongoing disagreements over "coronabonds." Germany and several other countries continue refusing to mutualize the debt in order to support the worst-hit countries. The continent's largest economy has been open to issuing unconditional bailouts to southern countries but not to share the debt.
The Eurogroup – finance ministers of the 19 countries that comprise the eurozone – meet today and will try to hammer out a deal. German Chancellor Angela Merkel said that this is the EU's most difficult moment and the longer countries remain at loggerheads, the more the euro could suffer.
Global COVID-19 cases have reached 1.35 million at the time of writing, with deaths nearing 75,000. Further reports from Spain, Italy, France, and New York are set to move EUR/USD in the session.
Economic data from the US and Europe refer to February – before the crisis struck – and will likely be ignored by markets.
EUR/USD Technical Analysis
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The world's most popular currency pair has broken above the downtrend resistance line that accompanied it since late March but is still trading below the 50, 100, and 200 Simple Moving Averages on the four-hour chart. Critical resistance waits at 1.09, which provided support late last week and is also where the 100 SMA meets the price, in addition to being a round number.
Resistance beyond 1.09 awaits at 1.0950, which held EUR/USD down last week. It is followed by 1.1050, which capped another recovery attempt last week, and then by 1.1090 and 1.1150.
Support is at 1.0840, which held the currency pair on Monday, followed by 1.0765, Monday's low. The next significant cushion is only at 1.0640.
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