On Wednesday, the EURUSD pair regained the peak of 1.0981 on the ECB decision to continue with monetary policy easing however it quickly lost the steam, returned to the 1.0940 area and finally closed the day in the red near the 1.0905 mark. Today the major managed to edge higher to the 1.0930 area but failed and dropped below the 1.0900 level.
Yesterday evening, the ECB held an emergency meeting and announced the launch of a new pandemic emergency purchase program (PEPP) that stipulates the purchase of €750bn of private and public sector securities through the end of 2020. The program is aimed at decreasing significant risks to the monetary policy transmission mechanism caused but the negative coronavirus impact. Though the new measures are said to be temporary, if the situation doesn’t improve the program may be extended. In response, the EUR rallied to highs however its upswing was checked due to the USD strengthening across the board.
On Thursday, the number of new coronavirus cases in mainland China rose again by nearly three times – 34 new patients versus 13 registered on March 17. The total number of infected people is 80,928 with 3,245 deaths. South Korea also confirmed the spike in the COVID-19 cases and reported 152 new patients. For the four days in a row, the numbers of the newly infected have been holding below 100. On the news, the USD got boosted and prevented the most popular major to stage a solid rebound.
Amid the absence of the important macroeconomic releases, traders will continue to watch for the coronavirus headlines that keep on spreading havoc on the markets.
From the technical point of view, the EURUSD pair sits in the wide trading range of 1.0875-1.0981 and holds below its SMA200 (today at 1.1195) on the 1-hour chart. Despite the ECB efforts to support the major, it is unable to witness a strong recovery and keeps its bearish bias intact. Thus, it would be prudent to refrain from placing aggressive bullish bets at least for the time being. The support is at 1.0800, 1.0785 and 1.0700 while the resistance is seen at 1.1040, 1.1185 and 1.1235.
