EUR/USD: Five reasons to drag the pair down

FXStreet Team FXStreet

Five factors are all playing against the EUR/USD pair, in the opinion of FXStreet’s analyst Yohay Elam.

Key quotes

“COVID-19 cases and deaths continue rising in the old continent, the epicenter of the disease. France and Spain both announced record numbers of mortalities on Wednesday.”

“The eurozone remains split between the camp demanding to mutualize the debt and show solidarity, and the one opposing it, led by Germany. The potential political crisis is weighing on the common currency.”

“After skyrocketing to 3.283 million in the week ending on March 14, jobless claims Thursday’s report for the week that ended on March 21 could be even higher. Goldman Sachs foresees 5.25 million claims. Devastating figures could be positive for the safe-haven US dollar.”

“Republicans are not enthusiastic about President Donald Trump’s calls for infrastructure spending. If they change their mind, the dollar could fall but until then, the market mood could stay downbeat.”

“Bloomberg reported that US intelligence agencies suspect that Chinese confirmed cases and deaths are far higher. The news implies a worse trajectory and protracted economic suffering, weighing on sentiment and benefiting the US dollar.”

Author

FXStreet Team

FXStreet

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

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Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

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