EUR/USD firmer, challenges weekly highs above 1.0860

EUR/USD moves higher to the 1.0860/65 band on Tuesday.
The offered bias stays unchanged around the dollar.
COVID-19 fears keep driving the price action in the global markets.

Pablo Piovano FXStreet

The shared currency is extending the positive tone for yet another session on Tuesday and is lifting EUR/USD to the area of weekly tops in the 1.0865/70 band.

EUR/USD looks to coronavirus, USD

EUR/USD is so far posting gains for the third consecutive day on Tuesday, managing well to prolong the rebound from last week’s 2020 lows in the 1.0780 zone.

The pair’s upside finds support in the corrective decline in the greenback, all amidst increased fears surrounding the Chinese coronavirus (COVID-19) and the persistent demand for the safe havens, prompting US yields to drop to levels last seen in July 2016 around 1.37%.

In addition, Monday’s positive results from the German IFO survey also lent extra (and unexpected) wings to the pair, which is looking to consolidate in levels well above 1.08 the figure.

Nothing worth mentioning in the euro docket on Tuesday, while all the attention remains on the fast-spreading virus and its impact on global growth prospects.

Across the pond, February’s Consumer Confidence gauged by the Conference Board will be the salient event seconded by the S&P/Case-Shiller index and the speech by FOMC’s R.Clarida at the NABE Conference.

What to look for around EUR

EUR/USD keeps the bid bias unchanged so far this week on the back of upbeat data in Germany, managing at the same time to put further distance from recent YTD lows. As usual, USD-dynamics are seen dictating the pair’s price action for the time being along with the broader risk appetite trends, where the COVID-19 remains in centre stage. On another front, the ECB is expected to finish its “strategic review” (announced at its January meeting) by year-end, leaving speculations of any change in the monetary policy before that time pretty flat. Further out, latest results from the German and EMU dockets continue to support the view that any attempt of recovery in the region remains elusive for the time being and is expected to keep weighing on the currency.

EUR/USD levels to watch

At the moment, the pair is gaining 0.10% at 1.0863 and faces the next up barrier at 1.0879 (2019 low Oct.1) seconded by 1.0954 (38.2% Fibo of the 2020 drop) and finally 1.0981 (monthly low Nov.29 2019). On the downside, a break below 1.0777 (weekly/2020 low Feb.20) would target 1.0710 (monthly low Jan.5 2016) en route to 1.0569 (monthly low Apr.10 2017).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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