On Friday, the EURUSD pair continues its march north and challenges the 1.0800 round figure. The pair lost about 60 points on a daily basis and keeps on staying in the red zone despite yesterday’s awful US jobless claims readings.
On Thursday, the US statistics showed that the number of people seeking unemployment benefits doubled versus the prior result and exceeded 6,6 mln. However, the USD benefitted from its safe-haven status and took the 100.00 mark. On the last trading day, the greenback sits comfortably above the mid-100.00 area weighing on the most popular currency pair.
Another factor that doesn’t allow EUR to take a breath is the new economic crisis in Europe. The problem of the such-called ‘coronabonds’ is far from being resolved. While Spain, France, and Italy urge issuing Eurobonds that would enable European countries to get funds and increase their spending without raising their national debts, Germany and Austria are strongly opposed to the idea. If the compromise is not found anytime soon, the EUR may continue its plunge.
Moreover, the coronavirus economic impact has already started to be felt. Today’s EZ and Germany services PMI reflected the sharp drop in the sector. Eurozone’s final readings came at 26.4 versus 28.4 preliminary while in Germany PMI figures shrank from 34.5 preliminary to 31.7. The new pandemic severely hit the Eurozone economy last month. April numbers will likely be the same however traders are concerned that this may overflow to May that will lead to the subdued economic activity throughout the whole Q2.
Meanwhile, the pandemic situation in Europe hasn’t improved much as of late. There are more than one million infected and 50,000 dead worldwide and 60% of all the fatalities in the world came from France, Italy, Spain, and the UK.
In the NA session, the US will publish its NFP data. And though the readings are not as affected by the epidemic as the jobless claims, the number of new positions may reduce by 100K. However, the US Dollar may once again benefit from a negative surprise and heighten the pressure on the major.
From the technical point of view, on the 1-hour chart, the EURUSD pair breached the SMA200 at 1.0930 and took a foothold below this level. Thus, the major will likely continue its decline in the near-term. The support is at 1.0785, 1.0720 and 1.0635 while the resistance is seen at 1.0900, 1.0965 and 1.1030.