The euro made earlier bullish attempts amid a broad-based dollar weakness on Monday. EURUSD rose to the 50-DMA around 1.0970. The moving average acted as a local resistance and triggered profit-taking that brought the pair to a daily low of 1.0925. As a result, the common currency turned slightly negative in the daily charts, and it looks like the pair is ready to spend some time in a consolidation mode before it decides on a clear direction.
At the start of the week, the greenback came under the selling pressure against most counterparts. However, the US currency trimmed initial losses and thus capped the bullish potential in the euro. Apart from the mentioned 50-DMA, there are other resistance levels on the way north, including the 1.0890 area, where the 20- and 100-DMAs converge. In other words, if the euro manages to overcome the 50-DMA, it will likely encounter fresh barriers afterward.
On the negative side, risk sentiment has deteriorated on Monday, helping the dollar to stay afloat due to its safe-haven status. The coronavirus-related developments continue to dent investor optimism. Today, new cases in China surged to a six-week high amid a rise in infected travelers arriving from overseas. on the other hand, there are efforts in some countries to relax lockdown measures. In general, risk sentiment will remain fragile until the pandemic reaches its peak.
Should EURUSD fail to stay around the current levels and come under more severe pressure, the prices may get back below 1.09 and revisit the recent local lows around 1.0850. As the daily RSI remains neutral, it looks like the pair will continue to consolidate above 1.09 in the near term. Should dollar demand pick up, however, downside risks for the pair will surge.
Apart from the coronavirus theme, traders will pay attention to the upcoming economic data this week, including the German IFO survey, US retail sales, initial claims, and other reports.
