EUR/USD: Risk-on, charts favor gains but coronavirus woes to play spoilsport

EUR/USD trades a touch firmer as risk-on keeps the dollar under pressure.
A key technical indicator shows a bearish-to-bullish trend change.
Rising coronavirus cases across Eurozone may cap the upside.

Omkar Godbole FXStreet Contributor

EUR/USD looks north on renewed hopes for additional US fiscal stimulus. Technical indicators have also aligned in favor of the bulls; however, rising coronavirus cases across the Eurozone may cap gains in the common currency.

The pair is currently trading near 1.1770, representing a 0.10% gain on the day.

Risk-on

Asian stocks are extending Wednesday's gains and trading at one-month highs, tracking Wall Street's overnight rally.

The risk sentiment has strengthened on the back of President Trump's call for additional fiscal stimulus. Trump said Wednesday that he is ready to sign a stand-alone stimulus check bill, and returned to work in the Oval office in a show of strength.

As such, the safe-haven dollar is feeling the pull of gravity and keeping EURUSD bid.

Bullish technicals

The daily chart MACD histogram, which is used to identify trend strength and trend changes, crossed above zero on Wednesday, indicating a bearish-to-bullish trend change. The indicator has turned positive for the first time since Aug. 7.

Coroanvirus cases rise

Eurozone is experiencing a second-wave of the coronavirus. "Virus cases have hit a record high in France and Spain. France is now on its highest alert level while Spain warned of a tough few weeks ahead after virus cases topped 800K. New restrictions have been announced in many Eurozone nations including Italy and Spain," BK Asset Management's Kathy Lien noted.

The resurgence of coronavirus may renew fears regarding a prolonged economic slowdown and weigh over the common currency. Expectations for additional easing by the European Central Bank (ECB) are already being built into the market.

Apart from the above-discussed factors, the focus will be on the German trade balance and current account figures scheduled for release at 06:00 GMT. Also, speech by ECB's De Guidnos, Mersch, and ECB minutes may influence the EUR pairs. Later in the day, the US weekly jobless claims will take center stage.

Technical levels

EUR/USD

Overview
Today last price	1.1768
Today Daily Change	0.0005
Today Daily Change %	0.04
Today daily open	1.1763

Trends
Daily SMA20	1.176
Daily SMA50	1.1802
Daily SMA100	1.155
Daily SMA200	1.126

Levels
Previous Daily High	1.1782
Previous Daily Low	1.1725
Previous Weekly High	1.177
Previous Weekly Low	1.1615
Previous Monthly High	1.2011
Previous Monthly Low	1.1612
Daily Fibonacci 38.2%	1.176
Daily Fibonacci 61.8%	1.1747
Daily Pivot Point S1	1.1732
Daily Pivot Point S2	1.17
Daily Pivot Point S3	1.1675
Daily Pivot Point R1	1.1788
Daily Pivot Point R2	1.1813
Daily Pivot Point R3	1.1845

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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