EURUSD stays bearish despite recent bounce
The euro regained the upside bias on Monday, extending its bounce from long-term lows seen last week around 0.9535. EURUSD has recovered to the 0.9800 zone since then, approaching a slightly descending 20-DMA, currently at 0.9887. The pair was last seen changing hands around 0.9812, up 0.14% on the day.
Still, the shared currency struggled to make a decisive move in either direction, refraining from a more robust recovery as risk sentiment remains subdued. After solid losses on Friday, US stock index futures turned mixed on Monday while European equities opened lower as recession concerns continue to persist globally. In this context, the shared currency is likely to stay pressured in a wider picture, with bearish trend persisting in the short- and medium term.
The dollar itself is trading slightly higher on Monday following two days of decent losses last week. The USD index peaked at 114.80 and has been struggling to regain a decisive upside momentum. However, it seems the greenback could resume the ascent after some consolidation due to its safe-haven status, as investors will likely continue to sell risky assets amid lingering concerns over the economic outlook and rising geopolitical tensions globally.
EURUSD could also come under renewed pressure should the upcoming data out of the Eurozone point at slower growth in the regional economy. Meanwhile, the US jobs data due om Friday may revive the USD demand if the figures show that the employment market remains resilient, suggesting the Federal Reserve will continue to hike interest rates in aggressive manner.
Technically, the common currency needs to overcome the mentioned 20-DMA in order to retarget parity. But the pair is unlikely to make a decisive break above the 1.00 handle any time soon, with downside risks persisting for the time being.
