EUR/USD: Back below 1.11 as President Trump extends shutdown through April


  • EUR/USD has fallen back below 1.11 amid risk aversion in stocks. 
  • Investors fear deeper economic slowdown as Trump extends social distancing to counter coronavirus outbreak. 
  • Goldman Sachs believes the economic fallout has only just begun. 

The US response to curb the coronavirus outbreak seems to be causing renewed stress in the equity markets and pushing the EUR/USD pair lower.

EUR/USD rejected at 1.1145

Having turned lower from 1.1145 in early Asia, the pair is now trading in the red near 1.1080 and threatening to snap the six-day winning streak.

The dollar is again rising amid the risk-off tone in the Asian stocks and the US equity index futures. Investors are shunning risk despite China's rate cut, possibly due to the worsening situation in the US and President Trump's decision to extend social distancing through April, which could force large parts of the economy to shut down.

Analysts at Goldman Sachs are of the opinion that the economic fallout in the West has only just begun and another sell-off in the stock markets could be seen. As a result, the US treasuries (and the US dollar) could continue to draw haven demand in the near-term.

The offered tone may further strengthen if there is a delay in the unified fiscal response from the European Union, according to ANZ research.

The data docket is heavy on Monday with the  Eurozone consumer and business sentiment indices scheduled for release along with the preliminary German Consumer Price index for March. Across the pond, the focus will be on the Pending Home Sales and the Dallas Fed Manufacturing Index.

Global equities rallied last week, weakening the bid tone around the US dollar and helping EUR/USD rise from 1.0636 to 1.1148, as the US Federal Reserve announced an open-ended asset purchase program and the US Senate passed an unprecedented $2 trillion fiscal stimulus package. 

Technical levels

EUR/USD

Overview
Today last price 1.108
Today Daily Change -0.0060
Today Daily Change % -0.54
Today daily open 1.114
 
Trends
Daily SMA20 1.1066
Daily SMA50 1.1
Daily SMA100 1.1049
Daily SMA200 1.1082
 
Levels
Previous Daily High 1.1147
Previous Daily Low 1.0953
Previous Weekly High 1.1147
Previous Weekly Low 1.0636
Previous Monthly High 1.1089
Previous Monthly Low 1.0778
Daily Fibonacci 38.2% 1.1073
Daily Fibonacci 61.8% 1.1027
Daily Pivot Point S1 1.1013
Daily Pivot Point S2 1.0886
Daily Pivot Point S3 1.082
Daily Pivot Point R1 1.1207
Daily Pivot Point R2 1.1274
Daily Pivot Point R3 1.1401

 

 

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