EUR/USD probes 200-day MA on US dollar weakness
- Dollar sell-off is again fueling gains in EUR/USD, pushing the pair higher to key average hurdle.
- Downside risks persist as the virus outbreak is showing no signs of slowing down in the Eurozone.
Dollar sellers continue to dominate the proceeding in the FX markets on the last trading day of the week, pushing EUR/USD higher to the 200-day average hurdle lined up at 1.1082.
Dollar under pressure
The greenback is prolonging its recent downside bias with the dollar index, which tracks its value against majors, currently trading at lows below 99.00, representing a 0.60% drop on the day, having shed 1.47% and 0.82% on Thursday and Wednesday, respectively.
The sustained selling could be attributed to concerns regarding the US labor market, triggered by the official data released Thursday, which showed the initial jobless claims topped 3.2 million last week, beating the forecast for 1.5 million by a big margin. Additional downside pressure may be coming from the uptick in the global equity markets.
However, there is little news on the domestic front to support the ongoing EUR/USD rally. "Spain’s coronavirus death toll officially passed China’s, becoming the second-highest in the world. The health system is collapsing underneath the weight of the disease and the economy will follow," according to BK Asset Management's Kathy Lien.
There is general consensus that the economic damage across the Eurozone is likely to be more severe than other parts of the world. As a result, a sudden bearish reversal in EUR/USD cannot be ruled out.
On the data front, the focus will be on the US Personal Spending figure for February, scheduled for release at 12:30 GMT.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
