EUR/USD retreats from tops above 1.0800

EUR/USD climbed to the 1.0830 region earlier in the session.
The greenback corrects lower and allows the bounce in the pair.
Focus remains on the coronavirus and central banks’ measures.

Pablo Piovano FXStreet

Finally, some respite came in for the single currency at the end of the week after Thursday’s drop in EUR/USD to fresh 2020 lows in the 1.0650 region.

EUR/USD keeps looking to COVID-19 developments

Following three consecutive daily pullbacks, EUR/USD appears to have met some decent contention (temporary?) in the mid-1.0600s for the time being, area last visited in April 2017. Thursday’s significant pullback in the spot came in response to the ECB’s extra stimulus package of €750 billion and extra loosening of its monetary stance.

In fact, the greenback – tracked by the US Dollar Index (DXY) - is giving away part of its strong gains to fresh 3-year highs near the 103.00 mark earlier on Friday and collaborates with the corrective upside in the pair and the rest of the risk-associated space.

In the meantime, the developments around the COVID-19 continue to rule the sentiment in the global markets, while countries keep evaluating the potential damage to the domestic economies amidst the recent wave of easing monetary conditions from major central banks.

Data wise in Euroland, the Current Account surplus widened to €34.7 billion during January. Across the pond, Existing Home Sales are only due.

What to look for around EUR

EUR/USD remains under heavy downside pressure so far this week on the back of the strong comeback of the greenback, unabated COVID-19 concerns and fresh stimulus package delivered by the ECB. On the macro view, recent horrible prints in both Germany and the broader Euroland gave investors a “slap of reality” and hinted at the idea that a serious recovery in the region is still far away. This view is reinforced by the (un)expected impact of the coronavirus on the economy of the region.

EUR/USD levels to watch

At the moment, the pair is gaining 0.85% at 1.0781 and a breakout of 1.0992 (monthly low Jan.29) would target 1.1090 (200-day SMA) en route to 1.1186 (61.8% Fibo of the 2017-2018 rally). On the flip side, the next down barrier is located at 1.0652 (2020 low Mar.20) seconded by 1.0569 (monthly low Apr.10 2017) and finally 1.0494 (monthly low Mar.2 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.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.