On Tuesday, in the European trading the EURUSD pair declined to the 1.0830 region but then quickly recovered and closed the day in the green zone near 1.0880. The major opened Wednesday with small losses at 1.0860 however managed to attract buyers and surged to the 1.0895 area in the last hour.
There is no obvious catalyst behind the EUR upswing, though the indecisive USD that treads water near the 99.00 region being unable to stage a solid rally may be the reason. Coronavirus news headlines continue to appall markets and support risk aversion. According to the latest information, the disease has spreaded to some other European countries including Germany, Switzerland and Spain. Brazil also reported its first case while the total number of infected people in South Korea rose to 1261 (115 new cases today). And though the WHO still refuses to declare the new virus a global pandemic, the US stocks continue to suffer losses for the second day in a row while the US ten-year bond yields hit record lows, putting a lid on the US Dollar rise.
Another reason that may have supported the most popular trading pair was the second-tier French Consumer Confidence for February that arrived a tad better than expected. The report confirms that France is one of the European countries least affected by the coronavirus outbreak and looks quite encouraging.
As far as the other currencies are concerned, the USDJPY pair lost its traction but managed to stay above the key 110.00 mark, GBPUSD traded in the narrow range of 1.2985-05 but then dropped to the 1.2964, USDCAD surged to the 1.3300 area while USDCHF nosedived to 0.9740. The aussie was the main laggard as it hovered near the lowest level since 2009, the kiwi followed suit and kept in the red near 0.6310.
Today, in the absence of any important releases, coronavirus will continue to dominate market mood.
From the technical point of view, the EURUSD pair managed to finally take a foothold above its SMA200 (today at 1.0830) on the 1-hour chart but still trades much lower than the SMA200 on the 4-hour chart. The resistance is at 1.0905, 1.0925 and 1.0955 while the support awaits at 1.0830, 1.0805 and 1.0780-85. While the USD bulls are on the defensive the EUR may continue to move higher however without any strong driver it may falter, breach the SMA200 H1 and aim at 1.0785 (Feb 21 low).
