EUR/USD drops below 1.0800 as EU leaders struggle to agree on recovery package

The EUR/USD pair took advantage of the upbeat market during the early trading hours of the American session and advanced to 1.0850 but failed to preserve its momentum. With headlines coming out of the EU summit suggesting that the EU leaders having disagreements on the coronavirus recovery package, the shared currency came under renewed selling pressure and dragged the pair below the 1.0800 mark. As of writing, the EUR/USD pair was trading at 1.0783, erasing 0.35% on a daily basis.

European politics weigh on EUR

Commenting on Thursday's talks on the EU recovery plan, French President Macron noted disagreements persist among the EU states. Moreover, European Commission President von der Leyen said there were huge differences in how much support member states were willing to give in state aid. 

Although Italian Prime Minister Conte said that the EU leaders have made great progress on Thursday, the euro struggled to find demand.

On the other hand, the greenback gathered strength with risk-off flows starting to dominate the markets and caused the bearish pressure to remain intact. At the moment, the US Dollar Index, which fell below the 100 mark earlier in the day, is up 0.12% on the day at 100.47 and remains on track to close the fourth straight day in the positive territory.

On Friday, IFO Business Climate and Current Assessment data from Germany will be looked upon for fresh impetus. Later in the day, Durable Goods Orders and the UoM Consumer Sentiment Index will be featured in the US economic docket.

Technical levels to watch for